LAW R E F O R M C O M M I S S I O N O F V I C T O R I A

PLAIN ENGLISH
AND THE LAW
 ACKNOWLEDGEMENT
Back cover reproduced from Yes Prime Minister, Volume 1, by Jonathan Lynn
and Antony Jay, with the permission of BBC Enterprises Ltd.

ISSN 0818 7320

ISBN 0 7241 6561 6
Law Reform Commission of Victoria

Report No. 9

PLAIN ENGLISH
AND THE LAW
THE COMMISSION

For the purposes of the Reference, the Chairperson, in accordance with

s 12 of the Law Reform Commission Act 1984, created a Division
comprising the following members of the Commission:

THE DIVISION

David St. L. Kelly (Chairperson)

Professor Robert Eagleson (Commisioner in charge until 3 111211986)
The Hon Mr Justice James Gobbo
Mr Leigh Masel
Professor Marcia Neave
Mr Tony Smith
Ms Jude Wallace

OFFICERS OF THE COMMISSION

Executive Director:
Mr Andrew Phillips

Project Team:
Mr Robert Smith
Mrs Loane Skene
Mr Josef Szwarc
Ms Nerida Wallace
Mrs Sandy Ward (Reference Secretary)

Secretary:
Ms Robin Jackson

Librarian:
Ms Beth Wilson
CONSULTANTS

T h e Hon Michael Arnold, MLC

Mr Ben Bodna, Public Advocate
Mr Robin Brett
Mr David Burridge, Gledhill Burridge & Cathro
Mr Bruce Cameron, Gledhill Burridge & Cathro
Mr Michael Crennan
Mr Phillip Cummins, QC
Mr Mark Dreyfus, then Ministerial Adviser to the Attorney-General
Mr John Ewens, CMG, CBE, QC, former First Parliamentary Counsel
of the Commonwealth
Professor Harold Ford, Chairman, Companies & Securities Law Review
Committee
Ms Eve Grimm, Law Institute
Mr Peter Ickeringill, Mallesons Stephen Jaques
Mr Campbell Johnston, Blake & Riggall
Dr Greg Lyons, Chief Electoral Officer
Mr Peter Marks, McIntosh Hamson Hoare Govett Ltd
Mr Robert Miller, Director, Regulation Review Unit
Mr Eamonn Moran, Assistant Chief Parliamentary Counsel
Mr Ian Renard, Arthur Robinson and Hedderwicks
Dr Robert Smith, Member, Public Service Board
The Hon Haddon Storey, MLC
Ms Kathy Walter, Clayton Utz
 160 QUEEN STREET
MEL~URNE.VIC. 3000
AUSTRALIA
(0316024566

To the Hon J H Kennan MLC

Attorney-General of Victoria
Parliament House
MELBOURNE VZC 3000

Dear Attorney-General

In accordance with the provisions of section 6 (1) (a) of the Law Reform
Commission Act 1984, I submit the Commission's Report on its reference
on Plain English.

Yours sincerely,

David St L Kelly
Chairperson

30 June 1987
TERMS OF REFERENCE

T o inquire into and review current techniques, principles and practices

of drafting legislation, legal agreements and those Government forms
which affect legal rights and obligations, in order to recommend what
steps should be taken to adopt a plain English drafting style.
The Commission is to have regard to overseas experience in plain
English drafting and plain English legislation. It is required to make
particular reference to:
(a) the elements of a plain English drafting style
(6) current drafting techniques principles and practices
which are inconsistent with plain English drafting
and which impede comprehension
(c) whether any changes to common law and statutory
maxims, principles or rules of interpretation would
be needed to complement the adoption of a plain
English drafting style
(d) how computer technology can be applied to assist in
introducing plain English into legislation and
Government documents
(e) the identification of a strategy for the implementation
of plain English in legislation and Government
documents
( f ) whether legislation should be introduced requiring
certain categories of agreements and documents to
be written in plain English, and if so, the desirable
content of these laws
(g) whether plain English drafting should be
incorporated into law courses, and if so, the desirable
content.
TABLE OF CONTENTS

Paragraph Page
SUMMARY xi
1. INTRODUCTION 1
Reference 1
Work on the reference 2
Secondment of Professor Eagleson 2
Discussion paper 2
Other Developments 3
Commonwealth initiatives 3
Statements in State Parliaments 3
South Australia 3
Tasmania 3
Recent endorsements 4
Federal Government 4
New South Wales 4
Structure of report 4
Body of report 4
Appendixes to report 5
Manual and Takeovers Code 5
Legal documents 5
Context of criticisms 6
2. LEGAL LANGUAGE 9
Criticisms of Legal Language 9
General 9
Legislation 9
Private legal documents 10
Nature of the Problem 11
A separate language 11
A legislative example 11
A non-legislative example 12
Causes of the Problem 13
A mixture of languages 13
The supremacy of Parliament in law making 15
Calculation of fees 17
The common law 18
Professional pressures 19
3. SURVEY OF LEGISLATION 21
Language problems 21
Length of sentences 21
Unnecessary concepts 24
 Paragraph Page
Absence of underlying principle 42
Organisation problems 47
Within a single section 48
Within an Act as a whole 52
Failure to highlight central message 52
Separation of related material 55
4. PLAIN ENGLISH AND OBJECTIONS TO
IT IN THE LAW
Nature of plain English 57
Objections to plain English in legal drafting 58
a. 'Plain English involves a debasement of the 59
language'.
b. 'Plain English is incompatible with precision'. 61
c. 'It is impossible to draft complex laws which 67
are intelligible to the average citizen'.
d. 'There often isn't suficient time to draft in 73
plain English '.
e. 'Plain English would lead to uncertainty 80
through the loss of words and phrases whose
meanings have been settled by judicial
interpretation :
f: 'Plain English has only a limited role in 81
relation to documents establishing rights and
duties'.
g. 'Plain English cannot succeed without a new 84
approach to statutory interpretation'.
5. THE IMPORTANCE OF PLAIN
ENGLISH
The Rule of Law 94
Problems created by poor drafting 94
Recent concern 95
Relationship to government policy 96
Response of legal system 97
United States 97
Australia 99
Cost Savings 100
Costs of poor drafting 100
Savings on plain English forms 101
United Kingdom 101
Victoria 105
Savings on plain English legislation 106
Other benefits 107
6. IMPROVING THE CLARITY OF DRAFTING:
RECOMMENDATIONS
Training of Drafters 109
A Drafting Manual 109
Formal training courses 110
A n earlier experiment 113
Other models 114
A Legal Drafting Institute 116
 Paragraph Page
Broadening the experience of parliamentary 118 67
counsel
Electronic aids to drafting 120 69
Organisation of drafting services 123 70
Clarification of the role of legislative drafters 124 70
Victoria 128 72
A radical approach 129 72
Duties of instructing oficers 133 75
Improving regulations 134 75
Split responsibilities 134 75
Role of Chief Parliamentary Counsel 135 76
Reasons for concern 136 76
Achieving quality control 138 77
Drafting assistancefrom private practitioners 140 79
Private legal documents 146 81
7. IMPROVING ACTS AND REGULATIONS : 85
RECOMMENDATIONS
The structure of legislation 152 85
Relationship between body of Act and 152 85
schedules
Relationship between Ats and regulations 156 87
Reducing the total amount of legislative 159 88
material
The Design and Appearance of Legislation 163 91
Typography 164 91
Headings 165 92
Cross-referencing 167 93
Use of examples 169 94
Use of visual aids 171 95
Providing indexes 173 97
8. REWRITING EXISTING LEGISLATION
AND GOVERNMENT FORMS:
RECOMMENDATIONS 174 99
Rewriting legislation 175 99
Rewriting Government forms 178 101
INDEX 103
APPENDIX 1 DRAFTING MANUAL
APPENDIX 2 TAKEOVERS CODE
APPENDIX 3 SUMMONS AND INFORMATION
MAGISTRATES (SUMMARY PROCEEDINGS)
ACT 1975
APPENDIX 4 COVENANT AND AGREEMENT UNDER
SECTIONS 41 AND 47 OF THE HISTORIC
BUILDINGS ACT 1981 Printed
APPENDIX 5 LAW INSTITUTE'S MORTGAGE Separately
OVER BUSINESS
APPENDIX 6 FORMAT OF
LEGISLATION
APPENDIX 7 LEGISLATION REWRITING
PROGRAM
APPENDIX 8 PLAIN ENGLISH UNIT
 SUMMARY

GENERAL CONCLUSZONS

1 The Commission's examination and analysis of recent legislation and

of other legal documents has revealed that they suffer from a number
of linguistic defects. They also suffer from excessive sentence length,
the creation and use of unnecessary concepts, poor organisation of
material and unattractive layout.
2 These defects are not required by policy or by existing law. They are
solely matters of drafting. They make many legal documents much less
intelligible to their audiences than they should be. Even judges and
experienced lawyers have difficulty with them. They are regularly
unintelligible to non-lawyers, even when they are experts in the relevant
fields.
3 The clarity of legal documents would be considerably improved if
C
drafters got rid of these defects and adopted a plain English style in
p-the present one. Plain English is not a special language. It is
ordinary English, expressed directly and clearly to convey a message
simply and effectively. It does not require the abandonment of technical
terms or strict legal concepts.
4 It is not possible to draft laws and other legal documents on technical
and complex matters in a way to make them intelligible to the average
citizen. The average citizen lacks the necessary knowledge of the subject
matter, but it is possible to draft them in a way to make them intelligible
to a much wider audience.
5 Redrafts of the Companies (Acquisition of Shares) (Victoria) Code and
of other legal documents form appendixes to the Report. They
demonstrate that legal documents, even those dealing with a complex
subject, can be written in plain English without loss of precision or
accuracy.
6 Legislative requirements for a purposive approach to be adopted in
interpreting legislation are important to the success of a plain English
style. Lawyers will have to develop a less technical approach to language.
 Why is plain English important?

7 Plain English in legislation is important because it helps members of

the public to comply with their legal obligations and to obtain benefits
to which they are entitled. Laws and documents should not be drafted
on the assumption that a trained lawyer will be available to interpret
them.
Plain English in legislation is also important because it saves money.
Poorly drafted laws impose costs on those who administer them and on
those whose conduct they are intended to control. Time is wasted in
trying to understand them. Lawyers have to be employed to interpret
them.
Poorly drafted private documents impose similar costs on the persons
affected by them. Poorly drafted government forms also waste money.
They produce inaccurate and incomplete responses. Substantial
administrative costs have to be incurred in correcting the information.

PARTICULAR RECOMMENDATIONS

A. Training of Drafters

Para 109 Drafting Manual The Commission has prepared a drafting manual,
dealing with linguistic matters, to assist legislative drafters to write
plainly and to avoid the defects which have been identified in present
legal drafting.
The drafting manual should be formally adopted by the
Government as its official guide to Departments and Agencies
in relation to the drafting of Acts, regulations and related forms
and explanatory documents. The drafting manual should be
supplemented by material prepared by Chief Parliamentary
Counsel dealing with the technical aspects of legislative drafting.
Paras 116-117 Legal Drafting Institute Training drafters by the apprenticeship method
is inadequate. It perpetuates poor drafting practices. At the Commission's
suggestion, Monash University is arranging for a feasibility study to be
conducted by the Public Service Board into the establishment of a Legal
Drafting Institute as a joint project between the University and the
Government. The feasibility study is to be funded by the Law
Foundation.
The Government should support the establishment of a Legal
Drafting Institute at Monash University as a joint project
between the University and the Government. When the Institute
is established, qualifications obtained from it should become,
except at base grade and in the absence of exceptional
circumstances, a mandatory requirement for appointment to,
or promotion within, the Office of Chief Parliamentary Counsel.
 Broadening experience Experience in private practice would help Paras118-119
drafters to appreciate the needs and abilities of those who are affected
by legal documents. Experience in policy Units in Departments and
Agencies would help drafters to appreciate the difficulties faced in
policy development. Each would contribute to clear and intelligible
drafting. Many recruits to the Office of Chief Parliamentary Counsel
have very little experience in private practice. They also have little
experience in policy develupmenr:
The Secretary to the Attorney-General's Department should
investigate ways of diversifying the experience of Parliamentary
Counsel. The options which should be investigated include
exchange schemes with, and secondments to, private solicitors'
offices and policy Units in Departments and Agencies.
Use of electronic aids Word processors and computers can provide Paras 120-122
valuable assistance in the drafting of clear documents. Software programs
with capacity for textual criticism are already commercially available.
Substantial improvements are likely to be made in the near future.
Chief Parliamentary Counsel should investigate existing
software programs and closely monitor developments to ensure
that appropriate use is made of electronic aids to drafting. A
software program should be developed in cooperation with Chief
Parliamentary Counsel elsewhere in Australia to facilitate clear
and consistent drafting.

Relationship between parliamentary counsel and instructing officers

The traditional view of the relationship between parliamentary counsel Paras 124-132
and instructing officers is that instructing officers should formulate all
the details of a legislative scheme before presenting it to parliamentary
counsel for drafting. Parliamentary counsel can play a valuable role in
assisting in policy development, particularly through advice on general
legal principles and on the legal options available for achieving specific
goals. Early involvement of parliamentary counsel in major policy
development would contribute to the consistency and clarity of draft
legislation.
Appropriate amendments should be made to the Cabinet
Handbook to give positive encouragement to instructing oficers
and parliamentary counsel to consult with one another during
the development of detailed policy proposals in respect of major
new legislation and major rewriting of existing legislation. These
consultations should not be restricted to the period immediately
before the making of the Cabinet submission for a Bill in
Principle. A Cabinet submission should not go forward for
consideration by the normal procedures unless parliamentary
counsel have indicated that the drafting instructions are
appropriate and adequate. Where consideration of the Bill in
 Principle cannot await the production of revised instructions,
the defects noted by parliamentary counsel should be attached
to the Cabinet submission when it goes f m a r d for consideration.

Duties of Instructing Oficers

Para 133 A lack of clarity concerning the duties of policy officers with respect to
the preparation of instructions for Parliamentary Counsel contributes
to inadequacy in drafting instructions. Steps should be taken to clarify
the role of policy officers and to assist them in performing their tasks.
Chief Parliamentary Counsel should take urgent steps to develop
guidelines and sets of questions to assist instructing oficers in
drawing up drafting instructions, and to arrange periodical
seminars involving parliamentary counsel and instructing
oficers to increase understanding on all relevant matters.

Improving Regulations

.as 134-139 Legislation is made up of Acts and regulations made uncter them. Acts
are drafted by the Office of Chief Parliamentary Counsel. Regulations
are usually drafted by subordinate legislation officers in the Departments
and Agencies which administer the Acts. This arrangement is an unusual
one. It makes quality control extremely difficult. The drafting of
regulations is normally centralised in most other Australian jurisdictions.
Chief Parliamentary Counsel should be responsible for maintaining
drafting standards in relation to all legislation.
Urgent consideration should be given to the possibility of
transferring to Chief Parliamentary Counsel responsibilityfor
the drafting of all regulations. The necessary reorganisation
should take account of the need not to interfere with the
obligation of Departments and Agencies, under section 5 of the
Subordinate Legislation (Review and Revocation) Act 1984
(Vic), to update and re-enact 1962-1972 regulations by 30
June 1988. If it is decided not to transfer drafting
responsibility to Chief Parliamentary Counsel, consideration
should be given to other organisational options to ensure
proper training of subordinate legislation officers and the
system-wide monitoring of standards by Chief Parliamentary
Counsel.
Use of private practitioners

All Acts are drafted in the Office of Chief Parliamentary Counsel. In Paras 140-145
some cases, valuable assistance could be obtained by engaging expert
members of the private profession.
In appropriate cases, members of the private profession should
be retained to assist the Ofice in drafting legislation. Chief
Parliamentary Counsel should retain ultimate authority and
responsibility for the legislation. Members of the private
profession should be retained only with the knowledge and
approval of the Minister responsible for the legislation in
question. The risk of the subsequent use of 'inside' information
should be dealt with by contractual arrangements between the
Officeof Parliamentary Counsel and the private practitioner.

Private Legal Documents

Implementation of the Government's plain English policy in the private Paras 146-150
sector should be achieved in cooperation with the Law Institute and
business houses. Both lawyers and businessmen are already moving
towards greater clarity in their documents. There is no need for
legislation in this area.
The Secretary to the Attorney-General's Department should
consult with the Law Institute of Victoria and the Victoria Law
Foundation with a view to setting up a program to implement
the Government's plain English policy in the private sector.
That program should concentrate initially on the standard
forms which have been prepared with the authority of the Law
Institute of Victoria. It should then be extended to forms used
by business houses, including banks, real estate agents and
insurers. The steering committee for the program should include
representatives of the Law Reform Commission of Victoria and
of the proposed Legal Drafting Institute at Monash University.

B. Structure and Design of Acts and Regulations

There are no clear criteria for determining what material should be Paras 151-155
included in the body of an Act and what should be left to Schedules. A
considerable amount of the detail which is included in the body of Acts
could be transferred to Schedules. This would enable principles to be
clearly stated in Acts and would contribute to clarity in drafting.
Chief Parliamentary Counsel should ensure that the body of
an Act commences with a clear statement of the relevant
 principles and that, as far as practicable, the details and
qualifications which have to be included in the Act are relegated
to Schedules.
Paras 156-1 58 There are also no clear criteria for determining what material should
be included in Acts and what should be left to regulations. The
development of clear criteria would contribute to better organisation of
material and improved clarity.
In consultation with the Cabinet OfJie, the Regulation Review
Unit and other interested bodies, Chief Parliamentary Counsel
should develop guidelines to assist Ministers, Departments and
parliamentary counsel in the allocation of legislative material
between an Act and the regulations made under it. In developing
the guidelines, Chief Parliamentary Counsel should take
account of the practical and constitutional concerns referred to
i n this report. The guidelines should be presented for
consideration by Government.
Paras 163-173 Improvements could be made in the design of Acts and regulations. A
modern format should be adopted.
In consultation with the Cabinet Office,the Regulation Review
Unit, the Victorian Government Printer and other interested
bodies, Chief Parliamentary Counsel should develop a new
design for Acts and regulations. The new design should
incorporate improved cross-referencing systems and indexes for
all major legislation. It should be presented for consideration by
Government.

C. Rewriting Existing Legislation and Government Forms

Paras 174- 176 The earlier recommendations should result in substantial improvements
in the drafting of original legislation. But they would leave untouched
existing legislation. It would not be cost-effective to rewrite all existing
legislation. A more selective approach should be adopted.
A legislation rewriting program should be established. It should
be aimed at a limited number of important Acts (say, 50) and
regulations made under them.
Paras 178-181 Considerable savings could be made if Government forms were to be
redesigned and rewritten in plain English. Departments and Agencies
would benefit from expert assistance in conducting rewriting programs.
A small Plain English Unit should be established to assist in
the implementation of the Government's plain English program
in relation to existing forms and documents. The unit should
provide consultancy services to Departments and Agencies and
should monitor implementation of the plain English policy. It
should be dissolved within 3 years.

xvi
1. INTRODUCTION

Reference

1 On 10 September 1985, the Attorney-General, the Hon J H Kennan

MLC, gave the Commission a reference dealing with the language used
in legislation, legal documents and government forms. The reference
followed a Ministerial Statement by the Attorney-General, Plain English
Legislation, on 7 May 1985.' In that statement, the Attorney-General
referred to a number of developments concerning plain English. These
included the publication in 1978 by the then Government of Plain
English, a short guide aimed at improving expression in government
documents. The Attorney-General then announced a number of changes
to the format of Acts of Parliament. These included:
abandonment of long titles
insertion of a statement of purposes or objects
simplification of the formal enacting words
removal of archaisms, including reference to regnal years
abandonment of unnecessary qualifications, such as 'In
this Act'; 'notwithstanding anything in this Act'; and
'subject to this Act'.
The Attorney-General continued:
What needs to happen now is to have a process whereby
Parliamentary Counsel draft Bills and legislation officers
draft subordinate legislation from the outset in plain English.
This requires a radical departure from tradition and a break
with the thinking of the past. It requires imagination, a spirit
of adventure and a boldness not normally associated with
the practice of law or with the drafting of legislation or
subordinate legi~lation.~

1. Hansard, Legislative Council, 1985,432.

2. Hansard, 437.
Work on the reference

Secondment of Professor Eagleson

The Commission's work on the reference was facilitated by the

secondment of Professor Robert Eagleson from the Department of
English at the University of Sydney to the Attorney-General's
Department and by his appointment as a part-time member of the
Commission for a year from 1 January 1986. The Chairperson appointed
Professor Eagleson as Commissioner in charge of the reference. In that
capacity, Professor Eagleson assisted the Attorney-General's Department
and the Historic Buildings Council to redraft important documents.
Professor Eagleson assisted a number of other bodies with advice on
plain English. He collaborated with the Office of Chief Parliamentary
Counsel in the drafting of several Bills and gave a number of seminars
to members of that Office on plain English drafting. He also assisted
the Department of Planning and Environment in redrafting its Planning
Scheme Ordinance under the Melbourne and Metropolitan Planning
Scheme.

Discussion paper

3 On 3 September 1986, the Commission published a discussion paper

dealing with most aspects of the reference. Copies were sent to all
Members of Parliament, all Judges, all Heads of Government
Departments and all Parliamentary Counsel in Australia. They were
also sent to all magistrates, all members of the Law Institute and all
barristers in Victoria. The discussion paper identified a series of problems
with present drafting styles and made a number of proposals for
implementing a plain English policy in the Office of Chief Parliamentary
Counsel and in the Public Service. Seminars were held in October 1986
with members of the Law Institute and with members of the Bar Council
to discuss the Commission's findings and proposals. The document was
also discussed at meetings of Chief Administrators, subordinate
legislation officers, instructing officers, and officers of Chief
Parliamentary Counsel's Office. Apart from these seminars and
meetings, written submissions were received from numerous individuals
and bodies, including Ministers, Judges, lawyers and public servants.
Special mention should be made of the valuable submissions received
from the First Parliamentary Counsel of the Commonwealth and from
Chief Parliamentary Counsel in Victoria, New South Wales, South
Australia and Queensland. The Commission expresses its gratitude to
all those, including its consultants, who made submissions or contributed
to discussions.
Other Developments
Commonwealth initiatives

4 Moves towards the adoption of plain English by government are not

restricted to Victoria. The Commonwealth Government took important
steps in 1983 and 1984. A number of tax and social security forms have
been rewritten as have documents produced by the Electoral
Commission, the Human Rights Commission and the Department of
Health. Documents used in internal government communications have
also been rewritten. Plain English has been adopted by the Opposition
and its Policies on Business3 acknowledges the value of plain English in
the context of an overall policy of business de-regulation. It commits
the Opposition to plain English in both legislation and legal documents.

Statements in State Parliaments

5 South Australia. On 21 August 1986, Mr D Ferguson, the Member

for Henley Beach in the South Australian House of Assembly, moved:
that this House supports the encouragement of the use of
plain language in legislation, legal documents and
Government forms.4
Mr Ferguson referred to developments in Victoria and emphasised the
benefits to the community and to government which would flow from
the adoption of a plain English policy. He noted that the Commissioner
for Consumer Affairs had criticised official documents in his last two
annual reports. He also noted that the Motor Registration Division had
redesigned a number of its forms with the assistance of members of the
English Department of Flinders Univer~ity.~
6 Tasmania. On 16 September 1986, Mr M Weldon, the member for
Braddon in the Tasmanian House of Assembly, drew attention to the
Commission's discussion paper in expressing the hope that the
Government would give consideration to requiring a simpler drafting
form:
Parliamentary draftspeople are operating in a system they
believe they are familiar with and have been for some time.
I am suggesting that the time has come when the
parliamentary draftspeople, legislators and the public
generally should be able to read and understand legislation
in plain English. I recommend to the Government that it

3. Adelaide, September 1986.

4. Hansard, House of Assembly, 1986, 532.
5. Hansard, House of Assembly, 28 August 1986,756.
 give due consideration to this [discussion paper] from the
Law Reform Commission of Victoria and that it also take
up some of the other drafting technique references which
exist.6

Recent endorsements

7 Federal Government. Two other recent endorsements of plain English

drafting should be noted. First, on 9 January 1987, the Minister for
Industry, Technology and Commerce (Senator Button) issued a news
release announcing the Commonwealth Government's strengthened
commitment to the review of business regulation. In the course of his
statement, the Minister announced that:
The Government has also committed itself to a policy of, as
far as possible, expressing laws and regulations in simple
English. That is in ways that can readily be understood by
those affected. This requires that-
definitions will be set out at the front of the legislation
sections will be expressed in short sentences
jargon and legalese will be avoided wherever possible.
8 New South Wales. Secondly, in January 1987, the Select Committee
of the Legislative Assembly of the New South Wales Parliament on
Small Business delivered its report Business Regulation and Licensing.
That report referred to and quoted from the Commission's discussion
paper.' It referred to the Commission's view that plain English need
not lead to a lack of accuracy and precision in legislati~n.~ It concluded
that a plain English style should be adopted in relation to all legislation
regulating business:
In drafting regulations, the Parliamentary Counsel's Office
should, as far as possible, simplify the wording of regulations
by using 'plain English' to facilitate the understanding of
regulatory requirements by those organisations which are
required to comply with them. The plain English policy
must be implemented in an appropriate manner to ensure
that legal clarity is not jeopardised, and legal loopholes are
not created.

Structure of report

9 Body of report. The report is divided into 8 chapters. Chapter 2 deals

with existing legal language. It notes the criticisms which have been

6. Hansard, House of Assembly, 1986,2508.

7. Paragraph 4.4.10.
8. Paragraph 4.5.8.
 made of that language and analyses the reasons why legal drafting is so
obscure. Chapter 3 contains the results of the Commission's survey of
recent legislation. It comments on the language and organisational
defects found in that legislation. Chapter 4 examines the nature of plain
English and the objections made to its use in the law. Chapter 5 discusses
the benefits which would flow from using plain English in Government
legal documents, in particular. Chapters 6, 7 and 8 discuss
implementation of the Government's plain English policy: chapter 6
examines ways of improving legal drafting; chapter 7 proposes changes
to the form of Acts and regulations; chapter 8 deals with the rewriting
of existing legislation and Government forms.

Appendixes to report

10 Manual and Takeovers Code. Attached to this report are 5 appendixes

of particular significance. The first is a Drafting Manual prepared by
Professor Eagleson with the assistance of officers of the Commission.
T h e Manual is not concerned with technical matters ueculiar to
legislative drafting. Instead, it concentrates on issues of language and
communication. It provides detailed guidance on how to avoid obscurity
and unnecessary obstacles to comprehension. It is designed for use by
those who draft legislation and related forms and documents. T h e
second appendix is a plain English version of the Companies (Acquisition
of Shares) (Victoria) Code (the Takeovers Code). This document
demonstrates that legislation can be written in plain English, even when
it deals with a difficult and complex subject. Initial drafts of the plain
English version were prepared by the Commission and refined and
improved with the critical advice and assistance of a number of p e ~ p l e . ~
T h e final version was prepared after wider consultation at meetings of
lawyers and regulators in Melbourne and Sydney.
11 Legal documents. The third, fourth and fifth appendixes contain
examples of government documents and private legal documents
redrafted in plain English. The government documents are the
Summons and Information used for both summary and indictable
offences and the Covenant and Agreement under sections 41 and 47 of
the Historic Buildings Act 1981 (Vic). The private document is the Law
Institute's form for a mortgage over business. The plain English
summons form was developed by Professor Eagleson with assistance
from a number of officers of the Attorney-General's Department and

9. These included Mr Bruce Cameron of Gledhill Burridge & Cathro, Ms Marina Darling of Corrs
Pavey Whiting & Byrne, Mr Mark Dickens, then General Counsel to the National Companies
& Securities Commission, Mr Mark Dreyfus, then Ministerial Adviser to the ktorney-General,
Mr John Ewens, CMG, CBE, QC, former First Parliamentary Counsel of the Commonwealth,
Professor Harold Ford, Chairman, Companies & Securities Law Review Committee, Ms Eve
Grimm of the Law Institute, Mr Peter Ickeringill of Mallesons Stephen Jaques, Mr Ian Jamieson,
Corporate Affairs Commission, Mr Peter Marks of McIniosh Hamson Hoare Govett Ltd, Mr
Leigh Masel, a part time member of the Commission, and former first Chairman of the National
Companies & Securities Commission, and Mr Ian Renard of Arthur Robinson & Hedderwicks.
Mr Renard was briefed to assist in settling the final draft.
 the Ministry of Police and Emergency Services.l0 The summons will
come into use on 1 January 1988. The plain English form combining
the original covenant and agreement under the Historic Buildings Act
1981 was prepared by the Commission with the assistance of a number
of officers from the Ministry of Planning and Environment, the Attorney-
General's Department and the Department of Property and Services.ll
It is already in use. The Law Institute's mortgage over business was
redrafted at the request of the Law Institute and with considerable
assistance from its members.12It has been submitted to the Institute for
its consideration.

Context of criticisms

12 Drafting legislation and other documents is no simple task. The drafting

of legislation, in particular, requires knowledge of the law, facility with
language and a good understanding of policy making and Parliamentary
processes. Above all, it requires intellectual rigour. The work done by
parliamentary counsel is of critical importance to the Government and
the legal profession. The traditional drafting style detracts from its value
by placing unnecessary obstacles in the way of the various audiences of
legislation. Parliamentary counsel themselves recognise that the present
drafting style could be improved. As Chief Parliamentary Counsel for
Western Australia has said:
Statute books contain at the present time much that is
unsatisfactory and much that is difficult to understand. The
need to communicate appears not infrequently to have been
overlooked ... [I]t is very clear that drafting techniques have
a long way to go before they satisfy all those who have a
right to be satisfied with the state of written laws. There is, I
think, an acknowledged obligation to take stock of
contemporary drafting practices and to improve legislative
drafting where this is seen to be possible.13
13 Since the Attorney-General's Ministerial Statement, the Office of Chief
Parliamentary Counsel has been developing a simpler drafting style.
Notable achievements include the Supreme Court Act 1986 and the
Planning and Environment Act 1987 (Vic). In the course of this report,
the Commission concentrates not upon those achievements but on

10. These included Mr D. Hourigan, Deputy Secretary, Courts Management Division, Attorney-
General's Department, Ms M. Ardlie, Mr G. Brooks, Mr R. de Saram, Mr J. Ferguson, Mr S.
Mackie and Mr T. Wilson of the Attorney-General's Department and Inspector P. McDonald of
the Ministry of Police and Emergency Services.
11. These included Mr J. Delves, Deputy Registrar of Titles, Mr T. Falkiner, then from rhe
Department of Planning and Environment, Mr David Gray, Ministerial Adviser to the Minister
for Planning and Environment; Mr Ray Harman from the Crown Solicitor's Office and Mr
Boyce Pizzey and Mr David Syme from the Historic Buildings Council.
12. Among those who assisted were Mr David Burridge of Gledhill Burridge & Cathro, Mr Campbell
Johnston of Blake & Riggall and Ms KathyWalter of Clayton Utz.
13. G.C. Thornton, Legislative Drafting, 3rd ed, Butterworths, London, 1987, vii.
defects in the traditional style. It does so in order to analyse the source
of the difficulties and to demonstrate how those difficulties could be
resolved. The criticisms which it makes are intended to be constructive.
They are not aimed at disparaging those who drafted the documents or
at calling in question their undoubted professionalism. Indeed, it would
be quite wrong to assume that the defects in drafting are the sole
responsibility of the drafters. There are many factors, historical and
other, which have contributed to the present drafting style. In relation
to legislative drafting, several submissions pointed to the fact that
instructing officers themselves are often wedded to a drafting style. In
some cases, they strongly resist a simpler method of exposition,
particularly if it involves a reduction in detail and a greater emphasis
on statements of principle. T h e Commission's criticisms are directed at
the style of legislation and of other legal documents, not at those who
have been trained to use it. They are aimed at assisting drafters to
recognise the defects and to assist in making the law and legal documents
more readily comprehensible and intelligible to a much wider audience.
 LEGAL LANGUAGE

Criticisms of Legal Language

General

14 The language of the law has long been a source of concern to the
community. It has been the subject of continuous literary criticism and
satire.' Critics have highlighted its technical terms, its convolutions and
its prolixity. These faults have been noted by judges and by practising
and academic lawyers as wellq2Calls have regularly been made for the
use of a more simple and straightforward style. Some improvements
have been made in response to those calls. But legal language remains
largely unintelligible to most members of the community. It even causes
problems for members of the legal profession. In some cases, the
obscurity may arise from the complexity of the law and of its subject
matter. In other cases, however, it is due to the complexity of the
language in which the law is expressed. Some lawyers do not take
sufficient care to communicate clearly with their audience. Letters,
private legal documents and legislation itself are still drafted in a style
which poses unnecessary barriers to understanding.

Legislation

15 Legislation is a particular source of coricern. It is the most important

form of legal drafting, since it creates rights and duties. Moreover, the
style in which it is written affects other legal writing in a variety of ways,

1. For example, Jonathon Swift, Gulliver's Travels, New York Modern Library, 1958,104; Charles
Dickens, Bleak House, Chapman & Hall, London, 1893, 8; James Joyce, Ulysses, Penguin,
London, 1977, 321; Groucho Marx, Animal Crackers, 1928, quoted by R. Goldfarb, and J.
Raymond, Clear Understandings: a Guide to Legal Writing, Random House, New York, 1982,
133. For other recent examples, see R. Benson, 'The End of Legalese: The Game is Over',
(1985) 13 Review of Law and Social Change 519 at 527-528.
2. For example, J. Bentham, 'Rationale of Judicial Evidence', John Bowring (ed), Works ofJeremy
Bentham Vol 11, William Tait, Edinburgh, 1838, 281; Renton Committee, The Preporation of
Legislation, Sweet & Maxwell, London, 1975, Cmnd 6053,6-7; Current Topics, 'Unintelligible
Acts', (1930) 4Australian Law Journal 105 at 106; Bismag Ltd, v Amblins (Chemists) Ltd [I9401
1 Ch 667, 687 (Mackinnon LJ); Davy v Leeds Corporation [I9641 3 All ER 390, 394 (Harman
LJ); City ofMarion v Becker (1973) 6 SASR 13, 29 (Bray CJ); BTAustralia Ltd v The Bell Bros
Ltd (1981) 6 Aust Company Law Reports 138, 149 (WellsJ).
 both direct and indirect. Criticism of the style of legislation has
intensified in recent years. One example is the comment by Mr Warren
Pengilley, a Sydney solicitor, on the draft Franchise Agreements Bill
1986:
While one must give credit to the government for coming
up with a policy which seems conceptually correct, one
must marvel at the prolixity with which the Parliamentary
Draftsperson attempts to achieve his objective Are we ...
inevitably locked into this tortuous language? Should we not
just once consider drafting a simply worded statute with a
clearly stated purpose and see if our judiciary, perhaps against
all punting odds, cannot come up with a reasonable
commercial interpretation of what is said?3
Another example is the condemnation of the Social Security Act 1947
(Cth) by the Chairperson of the Victorian Division Social Security
Appeals Tribunal, Mr Chris Loorham:
Other parliaments in Australia seem to be able to pass or
amend legislation in a manner that is at least intelligible to
well educated persons. It is unfortunate that the Parliament
of the Commonwealth of Australia allows legislation such
as the Social Security Act 1947 to remain on the statute
books which is almost totally unintelligible to anyone. The
fact that this Act directly touches the lives of every person
belonging to this country gives the Tribunal even greater
cause for concern. The current state of this most important
Act can only be described as a national d i ~ g r a c e . ~

Private legal documents

16 The problem is not restricted to legislation; it exists in private legal

documents as well. These are addressed to a much more restricted
audience than legislation. But their defects are occasionally noted in
the course of litigation. In Guardian Assurance Co v Underwood
construction^,^ for example, Mr Justice Mason of the High Court (now
the Chief Justice) referred to an insurance policy as being 'made up of
a jumble of ill assorted documents expressed in that distinctive style
which insurance companies have made their own'. And Mr Justice

3. In a paper entitled: State and Territory Credit Legislation-How Intelligible? How Effective? How
Necessary?, 11 April 1986, 11-12. See also Current Topics, 'The problem of drafting styles',
(1986) 60 Australian Law Journal 369; Current Topics, 'Legalese and Courtspeak', (1985) 59
Australran Law Journal 189; Sydney Morning Herald, 1 January 1985, 8; Lord Campbell, 'Law
in Plain Language', 80 The Law Society Gazette, 9 March 1983,621.
4. Margaret McGregor, Social Security Appeals Tribunal hearing, 19 November 1986. see PISO
criticism of Commonwealth tax legislation by Mark Liebler, a Melbourne solicitor, Australian
FinancialReview, 28 April 1987, 5.
5. (1974) 48 ALJR 307, 308. See also National Bank of Australasia v Mason (1975) 133 CLR 191,
203 (Stephen J).
 Powell of the Supreme Court of New South Wales recently said of a
partnership agreement that it:
can hardly be described as a shining example of the
draftsman's art-indeed, it is not going too far to describe it
as exuding the glutinous aroma of paste pot and s~issors.~

Nature of the problem

A separate language

17 These criticisms indicate the nature of the problems which exist in

relation to legal language.' Many legal documents are unnecessarily
lengthy, overwritten, self-conscious and repetitious. They consist of
lengthy sentences and involved sentence construction. They are poorly
structured and poorly designed. They suffer from elaborate and often
unnecessary cross-referencing. They use confusing tautologies such as
'ordered, adjudged and decided' and 'let, allow and permit'. They retain
archaic phrases such as 'know all men by these presents' and 'this
indenture witnesseth'. They use supposedly technical terms and foreign
words and phrases, such as inter alia and res ipsa loquitur, even when
English equivalents are readily available. They are unintelligible to the
ordinary reader, and barely intelligible to many lawyers. Language
which suffers from some or all of these defects is called 'legalese'.8
Linguists regard it as an identifiably different dialect or class of language.

A legislative example
18 A legislative example of this 'different dialect' is subsection 11 (3) of
the Foreign Proceedings (Excess of Jurisdiction) Act 1984 (Cth). One
of the aims of that Act is to protect an Australian defendant against the
consequences of being sued in foreign antitrust proceedings. Section 11
is designed to enable a defendant to recover reasonable costs and expenses
('recoverable costs and expenses') incurred in the foreign proceedings.
Subsection (3) states:
Proceedings in respect of a cause of action arising under this
section (in this sub-section referred to as 'cost proceedings')

6. Van der Waal v Goodenough 11983)NSW Conv R 55-1 15 at 56,850.

7. For detailed analysis, see F. Rodell, Woe unto You, Lawyers!, Pageant-Poseidon, New York,
1939; D. Mellinkoff, The Language of the Law, Little Brown & Co, Boston, 1963.
8. For further analysis of the characteristics of legalese, D. Crystal & D. Davy, InvestigaringEnglish
Style, Longman Harlow, 1969, at 193-217; V. Charrow & R.Charrow, Making Legal Language
Understandable: A Psycholinguistic Study of Jury Instructions (1979) 79 Columbia Law Review,
1306; E . Finegan, R. DiPietro (eds) Form and Function in Testamentary Language in Linguistics
and the ProfessMns, 1982, 113; D. Mellinkoff, Legal Writing: Sense and Nonsense, West Publishing,
St Paul, Minn, 1982.
 in relation to proceedings instituted in or before a foreign
court (in this sub-section referred to as the 'foreign
proceedings') may be instituted, notwithstanding that the
foreign proceedings are still pending, in respect of
recoverable costs and expenses that have been incurred by a
defendant in the foreign proceedings at any time before he
institutes the cost proceedings (other than recoverable costs
and expenses in respect of which cost proceedings have
previously been instituted as provided by this sub-section),
and the institution of cost proceedings under this section in
relation to foreign proceedings that are still pending does
not prevent the defendant from instituting cost proceedings,
after judgment has been given in the foreign proceedings or
the foreign proceedings have been discontinued or otherwise
terminated, in respect of recoverable costs and expenses
(other than recoverable costs and expenses in respect of
which cost proceedings have previously been instituted as
provided by this sub-section).
When unravelled, this provision of approximately 175 words has only
this to say:
Proceedings may be commenced at any time for recoverable
costs and expenses incurred in the foreign proceedings and
at later times for recoverable costs and expenses subsequently
incurred.

A non-legislative example

19 A somewhat similar style of drafting is evident in the following

introduction to a guarantee agreement:
NOW THIS AGREEMENT WITNESSES that in
consideration of the Lessor at the request of the Guarantors
(which request is evidenced by their execution of this
Agreement) continuing at its discretion and during its
pleasure the provision of a forbearing to sue for the
repayment of leasing accommodation already granted to the
Debtor or presently or at any time or from time to time
hereafter at its discretion and during its pleasure granting
further leasing accommodation advances a financial
accommodation to the Debtor the Guarantors jointly and
severally HEREBY GUARANTEE to the Lessor the due and
punctual payment to the Lessor of all moneys now or
hereafter to become owing or payable to the Lessor by the
Debtor (including but not limited to interest or any sum or
sums so owing and payable calculated at any specified
increased rate due to the default of the Debtor) either alone
or jointly with any other person on any account whatsoever
including all moneys which the Lessor pays or becomes
actually or contingently liable to pay to for or on behalf of
 or for the accommodation of the Debtor either alone or
jointly with any other person whether or not such payment
is made or liability arises by way of loans, advances or other
accommodation of whatever nature by reason of the Lessor
having already or hereafter become a party to any negotiable
or other instrument or entered into any bond, indemnity or
guarantee or, without restriction, under or by reason of any
transaction or event whatsoever whereby the Lessor is or
becomes or may become a creditor of the Debtor (all of
which moneys and liabilities as aforesaid are intended to be
secured by this Guarantee and are hereinafter referred to as
'the Moneys Hereby Secured').
This extract is a single sentence of approximately 180 words. Its main
effect is that:
a the guarantor guarantees the performance by a lessee of his or her
obligations to pay money under a lease;
and on that basis:
a the lessor promises not to sue the lessee for repayment of money
which is already owing or which becomes owing by the lessee.

Causes of the problem

20 Numerous factors have led to the development and retention of such

drafting styles. They include the:
a early use of Latin and French in legal documents
a supremacy of Parliament in law-making
a calculation of legal fees according to the length of a document
a common law tradition of determining what the law is by reference to
judgments in earlier cases
a development of standard pleadings
a professional pressure to conform with the practices of other lawyers.

A mixture of languages

21 Latin was the language of learning in Europe for many centuries.

English, like other vernacular languages, was thought not fit for
scholarship. In England, Latin was the principal written language for
important documents and books.9 It was the language used in statutes
until the fourteenth century, and in writs and court records until its use
was forbidden by statute in 1731. However, Latin was not the sole legal

9. For example, Glanvil's De Legibus (c. 1 187) and Bracton'sDe Legibus et ConsuetudinibusAngliae
(c. 1256).
 language used after the Norman Conquest. In the fourteenth and
fifteenth centuries, a form of Anglo-French came to be widely used,
particularly as the language spoken in the courts. The use of 'Law-
French', as the lawyers' mixed version of French and English came to
be known, was also forbidden by statute in 1731. But, by then, both
Latin and French terms were an integral part of the language of the
law.lo

22 Until English became the dominant legal language, there was neither
need nor opportunity for it to develop a full range of technical terms
and phrases. As it gradually became the official language, it borrowed
terms and phrases from French, in particular, to cover deficiencies in
its own word stock. As a result, English law could not be expressed in
pure English. Pollock and Maitland summarised the position in the
following way:
One indelible mark [the Norman Conquest] has stamped for
ever on the whole body of our law. It would be hardly too
much to say that at the present day almost all our words that
have a definite legal import are in a certain sense French
words. The German jurist is able to expound the doctrines
of Roman law in genuinely German words. On many a
theme an English man of letters may, by way of exploit,
write a paragraph or a page and use no word that is not in
every sense a genuinely English word; but an English or
American lawyer who attempted this puritanical feat would
find himself doomed to silence1l.

Many of the terms borrowed from French have now been absorbed into
the English language. Words such as 'contract', 'agreement', 'crime',
'damage', 'robbery', 'judge', 'court', 'juror', 'infant', 'action', 'conviction'
and 'pardon' offer no present impediment to understanding the law and
legal documents. There are other foreign terms with technical meanings
which do cause difficulty, but which may have to be retained. These
include 'habeas corpus', 'mandamus', 'certiorari' and 'chose in action'.
But not all the borrowings were, or remain, necessary. There are a
number of Latin and French terms and phrases which occur in legal
documents and for whose retention there is no overriding need. These
include 'ab initio', 'corpus delicti', 'in re', 'ex contractu', 'in custodia
legis', 'demise' and 'hereditament'. These might readily be replaced
with more common words and phrases. Latin and French are no longer
widely taught in Australia. Latin is no longer a prerequisite for admission
to Faculties of Law. More and more lawyers are unfamiliar with Latin
and French terms,and phrases. Certainly, their use is a hindrance to
communicating with the public.

10. See E. Campbell, Legal Research: Materials and Methods, Law Book Company, Sydney, 1979,
174-175; C. Weeramantry, The Law in Crisis, Capemoss, Lopdon, 1975,141-3.
11. The History ofEnglish Law, Cambridge [Cambridge] University Press, 1923, I, 80.
24 The mixed linguistic history of legal language also lies behind another
characteristic of legalese-the doubling and even trebling of synonyms,
as in:
acknowledge and confess
give, devise and bequeath
act and deed
null and void
goods and chattels
cease and desist
fit and proper
rest, residue and remainder
keep and maintain.
Originally there may have been good reasons for the practice. As lawyers
translated documents into English, they may have felt the need to
preserve some of the technical French or Latin terms. To assist
comprehension, they added an English word to the foreign one.
Consequently the English word 'acknowledge' was added to the French
'confess' and the English 'goods' was added to the French 'chattels'.
Unfortunately the practice of adding such extra words persisted even
when the borrowed terms became known and no longer needed
explanation. The result is that legal texts are cluttered with tautologies.
This confuses many readers. They strain to find a difference in the
meaning of the terms assuming that two or three words would not have
been used if one would have sufficed. Lawyers themselves are sometimes
misled. They are afraid to omit one of a set of synonyms for fear of an
unintended gap.12

The supremacy of Parliament in law-making

25 The constitutional changes which took place in the seventeenth century

and which established the supremacy of Parliament were also of great
significance in the development of legal language, particularly in its
legislative form. Before Parliament became the supreme law-maker,
the judges themselves commonly drafted statutes. They wrote them in
terms of general principle. 'No great precision of language prevailed
and the words were very loose and general'.13 The judges interpreted
the statutes liberally and without excessive regard to fine points.14This
'equitable' construction of legislation lost popularity as the judges' role
in drafting legislation diminished. Its death-knell was sounded by the .
constitutional settlement at the end of the seventeenth century. The

12. In some cases, the emphasis created by the tautology may have led to a particular interpretation
by the courts of the composite phrase which would not be given to its constituents. In such a
case, it may be necessary to retain the tautology.
13. Wilson v Knubly (1806) 7 East 128, 136 (Ellenborough CJ).
14. Eyston v Studd 2 Plowd 467; E. Driedger, A Manual of Instructions for Legislative and Legal
Writing, Vol6, Department of Justice, Canada, 1982, 541; D. St. L. Kelly, 'The Osmond Case:
Common Law & Statute Law', (1986) 60 Australian Law Journal, 513.
 significance of that settlement for legislative draftiig was, indeed,
profound:
The constitutional theory after 1688 bore upon interpretation
of statutes in several ways. It affected the form of legislation
by tending to make its provisions particular rather than
general, an enumeration of instances rather than a broad
statement of principle. Prior to the revolution, the details of
administration had been largely settled by the executive
under the prerogative. With prerogative cut to the bone, and
the command of the king no longer a justification for
governmental action, anything of moment that was done in
the name of government had to be authorized by a statute
passed by Parliament. However, to have given an authority
in general terms would have created a statutory prerogative.
Hence the tendency to specify in detail the exact powers
given. This spread to all branches of legislation and was
accelerated by the judicial policy of strict construction. When
the judges cut down the operation of general expression,
Parliament had to attempt to achieve its object by specific
enumeration of all that the general expression was meant to
include. A vicious circle was established, and prolixity
became a pronounced vice of eighteenth century statutes.15
26 Today's statutes are not as defective in this regard as their eighteenth
century counterparts. The relationship between the legislative and
executive branches of Government has changed in a number of ways
since then. Remarkable legislative powers are delegated to Ministers. In
some cases, they include even the power to extend or restrict the class
of persons or circumstances to which the Act itself applies.16 But the
legacy of the constitutional changes in the seventeenth century remains.
As recently as 1985, Lord Hailsham said in an address to the Statute
Law Society in England that 'the victory of the literalists [strict
constructionists] has led to increased pressure for detail on the part of
Departments'.'' In several Australian jurisdictions, legislation requires
the adoption of a purposive approach to interpretation.18 Even so, some
parliamentary counsel still fear that a judge may be only too willing to
read down the clear language of an Act.19 Consequently, nothing must
be left to chance. The striving of parliamentary counsel to prevent

15. E. Driedger, Manual of Instructions for Legislative Legal Writing, Vol 6, Department of Justice,
Canada, 1982, 544, quoting Corry (The Interpretation of Statutes. Appendix 1 to Cons. St)
16. See, for example, Credit Act 1984 (Vic), s19.
17. 'Addressing the Statute Law', [1985], Statute Law Review 4, 5.
18. Acts Interpretation Act 1901 (Cth), sl5AA (inserted in 1981); Interpretation of Legislation Act
1984 (Vic), s35. In the case of the Uniform Companies and Securities legislation, a similar
provision applies in all States; see, for example, Companies and Securities (Interpretation and
Miscellaneous Provisions) (Victoria) Code-s5A corresponds with sl5AA of the Acts
Interpretation Act 1901 (Cth).
19. The hypothetical perverse judge was named 'Judge Fiendish' by Rudolf Flesch: How to Write
Plain English, Harper & Row, New York, 1979, 36. Flesch's reaction was: 'Let's forget about
Judpe Fiendish. Let's write so that no reasonable man will misinterpret what we're trying to
say.
 judges from interpreting legislation restrictively leads to repetition, to a
maze of cross-references and to the inclusion of too much detail.

Calculation of fees

27 For a long time, legal fees were calculated on the number of sheets or
folios which the lawyers or court clerks produced. Malpractices, such as
the leaving of wide margins and the inclusion of blank spaces, soon
developed. Recitals and preambles were used by unscrupulous lawyers
because these preliminary sections gave scope for repeating material
contained in the body of the text. Efforts were made to curb these
malpractices by specifying the number of words each folio was to contain.
These efforts backfired badly. The supposed remedy did nothing but
encourage prolixity. So outrageous did the problem become that judges
were moved to act.
28 In 1556, one of the plaintiffs pleadings had been stretched from 16 to
120 pages. The Chancellor punished not the drafter, but his client. A
fine of 10 pounds and imprisonment was not enough:
It is therefore ordered that the Warden of the Fleet shall
take the said Richard Mylward ... into his custody, and shall
bring him unto Westminster Hall on Saturday next ... and
there and then shall cut a hole in the myddest of the same
engrossed replication ... and put the said Richard's head
through the same hole, and so let the same replication hang
about his shoulders with the written side outward; and then,
the same so hanging, shall lead the same Richard, bare
headed and bare faced, round about Westminster Hall, whilst
the courts are sitting, and shall shew him at the bar of every
of the three courts within the
The blame was more properly allocated when Chief Justice Hale later
wrote:
There are certain unreasonable impertinences used which ...
doth not only exceedingly prejudice the people, but ... serves
for no other use but to swell the attorney's bill, and at
present helps fill their prothonotaries' pocket, and to
reimburse with advantage the purchase of his place.21
The system of payment by the page has now all but d i s a p ~ e a r e d But
.~~
its legacy of repetition and of the use of lengthy recitals and preambles
has yet to be finally discarded.

20. Mylward v Welden (1565) Toth 101; 21 ER 136; cited in W. Holdsworth, A History of English
Law, Vol 5,1924,233.
21. M. Hale, 'Considerations Touching the Amendment or Alteration of Lawes', in I.Hargrave (ed),
A Collection of Tracts (1787), 287.
22. S. Robinson, Drafting, Butterworths, Sydney, 1973, 13.
The common law

29 The common law tradition of determining the law by reference to

judgments in earlier cases has also contributed to the development of
legalese, especially in relation to documents other than legislation. The
fact that earlier decisions, even ones that are hundreds of years old, may
be relevant in determining what the common law is, requires lawyers to
become familiar with writing styles which have long since passed from
common use. Not only do they adopt a similar form of expression by a
type of literary osmosis, they also use standard documents, especially
pleadings, which had proved successful in earlier cases. In the past,
these pleadings were collected and followed, however poorly they were
drafted and however obscure the language in which they were written.23
Books of forms and precedents were published. Some are still in use.
Long after the importance of pleadings has diminished and the law has
become more concerned with substance than form, lawyers continue to
collect and follow tried and proven precedents, often without scrutiny
or independent assessment. This approach has been extended to other
legal documents, including wills, deeds and contracts. Writing in 1973,
a leading commentator observed that:
Documents can only be judged by reference to the needs of
the clients in their desire to regulate transactions against a
background of conditions. The needs of clients differ; so do
the conditions. Nevertheless the majority of members of the
branches of the profession are addicted to the use of
precedent books, office forms, and printed forms. The
thinking seems to be that the needs of a client must be
satisfied by some cure prescribed years ago. T h e pipe dream
that the precedent books would always be legally viable was
rudely shattered in Dunn v Blackdown Properties Ltd., and
the foundations of the castle were further undermined in
Tophams Ltd. v Sefton where the House of Lords had the
effrontery to hold that a clause taken out of an office file of
a lease (effective in the lease) was valueless in a
...
conveyance That is not to say that precedents in general
do not have their uses. They serve a purpose even if it is
only to sow ideas in the minds of the draftsman. But he must
sift those ideas and select those that individually or together
give effect to what the parties need. He must judge each
clause by reference not only to the facts but also to the law.
Xf it does not fit exactly then he must alter it.24
30 Despite this advice, precedent books are often used unwisely. Individual
clauses are sometimes put together from different sources. As another
commentator observed recently:
One very expensive piece of litigation in equity, In Re
Gulbenkian's Settlements [I9681 3 WLR 1127, 119681 3 All

23. D. Mellinkoff, The Language ofthe Law, Little Brown & Co, Boston, 1963,139f.
24. S. Robinson, 'Drafting-Its Substance and Teaching', (1973) 25 Journal ofLegal Education 514,
515.
 ER 785, went to the House of Lords because the draftsperson
had carelessly telescoped two separate clauses, resulting in
uncertainty. Lord Reid commented that he 'was surprised
to learn that this botched clause has somehow found its way
into a standard book of precedent^'.^^
It is hardly surprising that different writing styles, all of them difficult,
sometimes appear in a single document. The development of word
processing, with its facility for producing standard documents with
required variations, has further institutionalised the problems.26

Professional pressures
31 Another factor which has been important in maintaining a peculiarly
legal language is the pressure on lawyers to conform with the conventions
of other lawyers. A person who wishes to become part of a group,
particularly a respected member of that group, is under considerable
pressure to conform with the language conventions of that group.
Experimental evidence has confirmed this in the case of scientists.=' A
project was based on a report of a medical experiment which was written
in the style generally followed by scientists. The report was rewritten in
plainer language and both versions were shown to a panel of scientists.
The only difference between the two versions was linguistic. The
scientists were asked to respond to a number of questions. Their answers
indicated that the scientists found the plain English version easier to
read, more dynamic, more indicative of a competent scientist and more
stimulating. But they still preferred to write in the style of the original
version. They apparently believed that the more difficult style was
expected of them. That style has no particular merit as communication.
It is a matter of appearances. It has nothing to do with professional
ability.

25. (1987) Legal Service Bulletin 73.

26. Some documents are so far removed from plain language and so difficult to disentangle that
grammatical and syntactic blunders due to printing or proofreading errors are sometimes
overlooked even by the lawyers who use them. Below, Appendix 5.
27. E. Bardell, 'Does Style Influence Credibility and Esteem?' (1978)35 Communicator of Scientifi
and Technical Information 4-7; C.C.R. Turk, 'Do you Write Impressively?' (1978), 9 Bulletin of
the British Ecological Society, 5-10. The study was later duplicated by L. H. Wales in the United
States with similar results see Wales, L. H. Technical Writing Style: Attitudes Towards Societies
and their Writing (University of Vermont Agricultural Experiment Station) 1979.
3. SURVEY OF LEGISLATION

32 Isolated complaints about legal language do not establish the existence

of a general problem. T o assess how widespread the problem is, the
Commission made a special study of Acts passed by the Victorian
Parliament during 1985 and 1986. It also made a study of some recent
Commonwealth legislation. This examination confirmed that the defects
alleged to exist in legal language appear frequently in legislation. There
are two main types: defects in language and defects in organisation.
T h e problems are described in the following paragraphs. Examples are
given from the relevant statutes. In some cases, additional examples are
given from other Victorian or Commonwealth legislation.

Language problems

33 Many of the problems for comprehension posed by legislation arise

from a failure to observe a number of basic rules about language and
communication. These rules are well known and not difficult to observe.
Many of them were referred to in the discussion paper. They are set out
in greater detail in the Drafting Manual in Appendix 1. The following
paragraphs deal only with three recurring problems which give rise to
grave difficulty for readers-sentence length, the creation of unnecessary
concepts, and a failure to state underlying principles.

Length of sentences

34 Example 1. It has long been recognised that long sentences present a

considerable obstacle to understanding a document.' Long sentences
abound in legislation. The following example is from section 128 (1) of
the Accident Compensation Act 1985 (Vic):

1. E. Gowers, The Complete Plain Words, HMSO, 3rd ed, London, 1986, 13. Renton Committee,
The Preparation oflegislation, Sweet & Maxwell, London, 1975, Cmnd 6053, paragraphs 11.9
to 11.11 at 64. G.C. Thornton, Legislative Drafring, 3rd ed, Butterworths, London, 1987,61.
 Where in respect of any claim the Tribunal determines that
compensation is or may be payable under this Act, but is
unable presently to ascertain the total amount of the
compensation, the Tribunal may make an interim award for
payment of the whole or any part of the compensation and
the making of any such interim payments shall not preclude
the Tribunal from making in respect of the same claim a
further interim decision or determination or a final decision
or determination or prejudice the rights of either of the
parties in respect of any such further or final decision or
determination.
In this extract, the conjunction 'and' (in 'and the making ...') is simply
a substitute for a full stop. The readability of the section would have
been improved substantially if it had simply been split in two.
35 Example 2 . The clearer the structure of a long sentence, the less the
difficulty it creates for understanding. But the longer a sentence runs,
the greater the probability that it will become structurally complex. It
is this complexity rather than the mere length of a long sentence which
leads to incomprehensibility. For example, subsection 27 (2) of the
Companies (Acquisition of Shares) (Victoria) Code states:
Where an offeree who has acceptea a take-over offer that is
subject to a prescribed condition receives a copy of a notice
under sub-section (1) in relation to a variation of offers
under the relevant take-over scheme, being a variation the
effect of which is to postpone for a period exceeding one
month the time when the offeror's obligations under the
take-over scheme are to be satisfied, the offeree may, by
notice in writing given to the offeror within one month after
receipt of the first mentioned notice and accompanied by
any consideration that has been received by the offeree
(together with any necessary documents of transfer),
withdraw his acceptance of the offer and, where such a
notice is given by the offeree to the offeror and is
accompanied by any such consideration and any necessary
documents of transfer, the offeror shall return to the offeree,
within 14 days after receipt of the notice, any documents
that were sent by the offeree to the offeror with the
acceptance of the offer.
This sentence runs to 174 words. But it is not just its length that creates
the difficulty. It is, rather, the mass of information which it contains
and its intertwining of ideas that create the problem. The information
could have been presented much more clearly if the requirements
relating to the form and timing of the relevant notice had been set out
separately.
36 Example 3. Another example is subsection 25 (3) of the Credit Act
1984 (Vic):
Where, by reason of sub-section (I), a tied loan contract is
discharged when a contract of sale is rescinded or
discharged-
 (a) the credit provider is liable to the buyer for the
amount (if any) paid by the buyer to the credit
provider under the tied loan contract to the extent
that it is discharged;
(b) the supplier is liable to the credit provider for-
(i) the amount (if any) paid under the tied loan
contract, to the extent that it is discharged, by the
credit provider to the supplier;
(ii) the amount paid under the tied loan contract, to
the extent that it is discharged, by the credit
provider to the buyer and paid by the buyer to the
supplier; and
(iii) the amount of the loss (if any) suffered by the
credit provider by reason of the discharge of the
tied loan contract, being an amount not exceeding
the amount of the accrued credit charge under
the tied loan contract; and
(c) the buyer is liable to the credit provider for the
amount (if any) paid under the tied loan contract, to
the extent that it is discharged, to the buyer by the
credit provider, other than amounts paid to the buyer
and paid by him to the supplier-
and, where the contract of sale is a contract of sale of goods
or services-
(6) if the goods are in the possession of the buyer-
(i) where, before the rescission or discharge of the
contract of sale, there was a mortgage relating to
the tied loan contract to the extent that it is
discharged, the buyer shall deliver the goods to
the credit provider; and
(ii) where before the rescission or discharge of the
contract of sale, there was a mortgage relating to
the tied loan contract to the extent that it is
discharged, the buyer shall deliver the goods to
the credit provider; and
(e) if the goods are in the possession of the credit provider
and no amounts are owed to the credit provider under
paragraph (b), the credit provider shall deliver the
goods to the supplier.
This subsection is made up of a single sentence of 345 words. The
division into paragraphs and subparagraphs certainly helps the reader.
But the structure is too complex for clear communication. Take
subparagraph (6) (1). There is a subordinate clause-'Where, before the
rescission ... '-which is embedded in another subordinate clause-'if
the goods are in possession ... ' This, in turn, is embedded in yet another
subordinate clause-'where the contract of sale ... '-which is co-
ordinated with another subordinate clause introduced some 200 words
earlier at the beginning of the subsection-'Where, by reason of '. It ...
is also related to an item within a subordinate temporal clause-'when
...
a contract of sale '
Unnecessary concepts

37 Example I. Another practice which causes difficulty is the creation of

special concepts in order to deal with complex subject matter. This
practice is followed in a number of sections of the Companies
(Acquisition of Shares) (Victoria) Code. Section 37 of the Code is an
example. It imposes obligations on persons to report to securities
exchanges if they acquire or dispose of vdting shares at certain times. It
commences with 26 lines which create the concepts 'relevant period'
and 'prescribed person':
37 ( 1 ) Subject to this section, where-
(a) a person proposes, or 2 or more persons together
propose, to dispatch a take-over offer, or to cause a
take-over announcement tb be made, in respect of
shares in a company; or
(b) a person has, or 2 or more persons together have,
dispatched a take-over offer, or caused a take-over
announcement to be made, in respect of shares in a
company and the period during which the take-over
offer remains open, or the offers constituted by the
take-over announcement remain open, has not
expired, the person, or either or any of those persons,
or a person associated with the person or with either
or any of those persons, or, if the person either or any
of those persons or any persbn associated with the
person or with either or any of those persons is a
corporation, an officer of the corporation or a person
associated with such an officer, shall not make or
issue, or cause to be made or issued, any statement to
the public or to all or any members of the target
company (including a statement included in a Part A
statement or a Part C statement but not including a
statement made or issued solely to officers of or
advisers to the target company) that contains a forecast
in respect of the profits or profitability of the target
company or, if the person or either or any of those
persons or any person associated with the person or
with either or any of those persons is a corporation, a
forecast in respect of the profits or profitability of
that corporation.
38 The remaining subsections specify the persons who are to report, the
circumstances in which they are to report and the particulars to be
covered in a report. Subsection (2) imposes obligations on:
[A] person who, at the commencement of a period that is a
relevant period in relation to a listed company, is a prescribed
person in relation to that period by reason of subparagraph
(1) (b) (11 -..
Similarly, subsection (3) imposes obligations on:
[A] person who, during the period that is a relevant period
in relation to a listed company, becomes a prescribed person
 in relation to that period by reason of subparagraph (1) (b)
(ii) ...
These and analogous descriptions in the remaining subsections are
intended to identify the persons on whom the relevant obligations are
imposed. They require cross-referencing to subsection (1) for the precise
meaning in each case of 'relevant period' and 'prescribed person'. The
relationship between the various subsections which imposes obligations
is entirely lost. It would have been far better to dispense with these
artificial constructs and to build into each subsection the precise
description of the relevant person and period. This would have resulted
in a much simpler statement of the lawe2
39 Example 2. Another example of the creation of unnecessary concepts
comes from section 150 of the Futures Industry Act 1986 (Cth). The
purpose of this section is to ensure that a continuing failure to comply
with the Act's requirements continues to be an offence even if the time
for complying has passed and even if the offender has already been
convicted of the relevant offence. In subsection 150 (6), a number of
concepts are established:
(6) In this section-
...
"primary derivative offence", in relation to failure to do an
act, means an offence (other than an offence of which a
person is guilty by virtue of this section) of which a person
is guilty by virtue of being an officer of a body corporate
who is in any way, by act or omission, directly or indirectly,
knowingly concerned in or party to the commission by the
body corporate of a primary substantive offence in relation
to failure to do the act;
"primary substantive offence", in relation to failure to do an
act, means an offence (other than an offence of which a
person is guilty by virtue of this section) constituted by
failure to do the act, or by failure to do the act within a
particular period or before a particular time;

"relevant day", in relation to an offence of which a person

is guilty by virtue of this section, means-
(a) in a case where the information relating to the offence
specifies a day in relation to the offence for the
purposes of this section, being a day not later than
the day on which the information is laid-the day
the information so specifies; or
(b) in any other case-the day on which the information
relating to the offence is laid;

"secondary derivative offence", in relation to failure to do

an act, means an offence or further offence of which a

2. See the plain English version of s37 in Appendix 2.

 person is, in relation to failure to do the act, guilty by virtue
of paragraph (4) (c) or (4;
"substantive offence", in relation to failure to do an act,
means
(a) a primary substantive offence in relation to failure to
do the act; or
(b) a further offence of which a person is, in relation to
failure to do the act, guilty by virtue of sub-section
(3).
40 The remaining subsections make use of these concepts. Subsection (4)
is the main provision:
(4) Where-
(a) a body corporate is guilty of a primary substantive
offence in relation to failure to do the act; and
(b) throughout a particular period (in this sub-section
referred to as the "relevant period9')-
(i) the failure to do the act continues;
(ii) a person (in this sub-section referred to as the
"derivative offender") is in any way, by act or
omission, directly or indirectly, knowingly
concerned in or party to the failure to do the act;
and
(iii) the derivative offender is an officer of the body
corporate,
then-
(c) in a case where either or both of the following events
occurs or occur:
(i) the body corporate is convicted, before or during
the relevant period, of the primary substantive
offence;
(ii) the derivative offender is convicted, before or
during the relevant period, of a primary derivative
offence in relation to failure to do the act,
the derivative offender is, in relation to failure to do the act,
guilty of an offence (in this paragraph referred to as the
"relevant offence") in respect of so much (if any) of the
relevant period as elapses-
(iii) after the conviction referred to in sub-paragraph
(i) or (ii), or after the earlier of the convictions
referred to in sub-paragraphs (i) and (ii), as the
case may be; and
(iv) before the relevant day in relation to the relevant
offence; and
(d) in a case where, at a particular time during the
relevant period, the derivative offender is firs?
convicted of a secondary derivative offence, or is
convicted of a second or subsequent secondary
derivative offence, in relation to failure to do the
act-the derivative offender is, in relation to failure
to do the act, guilty of a further offence in respect of
 so much of the relevant period as elapses after that
time and before the relevant day in relation to the
further offence.
41 The constant cross-referencing required by this method of drafting is
exhausting. The message could have been conveyed without creating
special concepts. The following plain English version of the whole of
section 150 dispenses with the artificial constructs in subsection (6). It
reduces the total length of the section from 960 words to 208:
1) Even if the period specified for an act has ended-
a) a person is guilty of an offence if he or she continues
to fail to do an act after being convicted of an offence
in relation to failure to do the act; and
b) an officer of a body corporate is guilty of an offence
if he or she is knowingly concerned in a continuing
failure by the body corporate to do an act if either
the body corporate has been convicted of an offence,
or the officer has been convicted of an offence under
section 151, in relation to failure to do the act.
2) A person may be guilty of successive offences in relation
to a continuing failure to do an act.
3) The penalty for a further offence is $50 multiplied by
the number of days in the period during which the further
offence continued between
a) the person's or officer's most recent conviction for
failure to do the act or, in the case of an officer's first
offence in relation to a continuing failure to do an
act, an earlier first conviction of the body corporate
for failure to do the act; and
b) the earlier of
i) the laying of the information;
ii) the day specified in the information.

Absence of underlying principle

42 Example 1 . T h e third practice which creates difficulty for readers is

common in complex legislation, in particular. It is the tendency to deal
at length and in separate subsections with a series of variations instead
of integrating the relevant statements in a single provision which states
the underlying principle. Again the Companies (Acquisition of Shares)
(Victoria) Code contains numerous examples. The Act provides two
main methods for a takeover. A person who wishes to take over a target
company may proceed by way of takeover offers made directly to
shareholders or by means of a takeover announcement through the
stock exchange. Part V of the Code contains provisions which are
applicable to both types of procedure. In some sections, however,
takeover offers and takeover announcements are dealt with separately
in different subsections. Section 40 is an example:
 (1) Subject to sub-section (3), during the period commencing
when a Part A statement is served on a target company and
ending at the expiration of 28 days after the day on which
the statement is served or, if take-over offers are dispatched
pursuant to the statement within those 28 days, at the
expiration of the period during which the take-over offers
remain open the offeror, or a person associated with the
offeror, shall not give, offer to give or agree to give to a
person whose shares may be acquired under the relevant
take-over scheme, or to a person associated with such a
person, any benefit (whether by payment of cash or
otherwise) not provided for under the take-over offers or, if
the take-over offers are varied in accordance with section
27, under the take-over offers as so varied.
(2) Subject to sub-section (3), during the period commencing
when a take-over announcement is made in relation to shares
in a company and ending at the expiration of the period
during which offers constituted by that announcement
remain open the on-market offeror, or a person associated
with the on-market offeror, shall not give, offer to give or
agree to give to a person whose shares may be acquired
pursuant to the take-over announcement, or to a person
associated with such a person, any benefit (whether by
payment of cash or otherwise) not provided for under the
terms of the take-over announcement or, if those terms have
been varied under section 17, under the terms as so varied.
(3) ...

43 There is simply no need for all this separate treatment. It is true that
the period during which the obligation continues varies from one type
of offer to another, but that variation can be captured in a single provision
covering both direct offers and offers made by an announcement at the
stock exchange. This not only reduces the length of the provision, it
also reveals the essential similarity of treatment of the two types of
procedure:
1) An offeror or an associate must not give, or offer or agree
to give, to an offeree or an associate of an offeree a benefit
not provided for under the offers-
a) within 28 days after the Part A statement is served;
or
b) if offers are made within that time-within the offer
period; or
c) after the takeover announcement is made until the
end of the offer period.

44 Example 2. A similar example of a failure to state the underlying

principle is provided by section 35 of the Code. This imposes a restriction

3. The plain English version (Appendix 2) contains no reference to variation under s27. If an offer
is varied, so is the offer period.

28
 on the disposal of shares by the offeror during particular periods. Direct
offers are again treated separately from offers made by way of an
announcement:
(1) During-
(a) the period commencing when a Part A statement is
served on the target company and ending at the
expiration of 28 days after the day on which the
statement is served or, if take-over offers are
dispatched pursuant to the statement within those 28
days, at the expiration of the period during which
the take-over offers remain open; and
(b) if take-over offers are dispatched, in accordance with
an order under section 46, pursuant to the
statement-the period during which the take-over
offers remain open,
the offeror shall not dispose of any shares in the target
company included in the same class of shares to which the
Part A statement relates unless another person (not being a
person associated with the offeror) has, after the Part A
statement is served and before the disposal takes place, made
a take-over offer or caused a take-over announcement to be
made in respect of shares in the target company included in
that class of shares.
(2) After the making of a take-over announcement in
relation to shares in a company and before the end of the
period in which offers constituted by the take-over
announcement remain open, the on-market offeror shall not
dispose of any shares in the target company included in the
same class of shares as the first-mentioned shares unless
another person (not being a person associated with the on-
market offeror) has, after the making of the announcement
and before the disposal takes place, made a take-over offer
or caused a take-over announcement to be made in respect
of shares in the target company included in that class of
shares.
45 The variation in the period during which the restriction applies does
not require separate treatment in separate subsections. The variation
can be captured in a single, integrated provision:
An offeror must not dispose of shares in the class covered by
a takeover scheme or a takeover announcement-
a) within 28 days after the Part A statement is served;
or
b) if offers are made within that time or are sent in
accordance with an order under section 64-during
the offer period; or
c) from the making of the announcement until the end
of the offer period.
unless, after the Part A statement was served or the
announcement was made, a person who is not an associate
 of the offeror has made offers under a takeover scheme or
by an announcement for shares of the same class.

46 Example 3. The Fair Trading Act 1985 ( V ~ C provides )~ another

example of a failure to state the underlying principle. Section 35 enables
a court to make certain orders in respect of a contravention of another
provision in Part I1 of the Act. The orders are of two types: an order to
disclose information and an order to publish certain advertisements.
Subsections (2), (3) and (4) set limits on those orders by reference to the
amount that a person would have to expend in order to comply with
them:
(2) Where, on an application made under sub-section (I),
the Court is satisfied that a contravention of a provision of
Part 11. has been committed, the Court shall not, in respect
of that contravention, make an order or orders under sub-
section (1) that the Court considers would, or would be
likely to, require the expenditure by the person or persons
to whom the order or orders is or are directed of an amount
that exceeds, or of amounts that, in the aggregate, exceed,
$50,000.
(3) Where, on an application made under sub-section (I),
the Court is satisfied that a person has committed, or been
involved in, two or more contraventions of the same provision
of Part II., being contraventions that appear to the Court to
have been of the same nature or a substantially similar nature
and to have occurred at or about the same time (whether or
not the person has also committed, or been involved in,
another contravention or other contraventions of that
provision that was or were of a different nature or occurred
at a different time), the Court shall not, in respect of the
first-mentioned contraventions, make an order or orders
under sub-section (1) that the Court considers would, or
would be likely to, require the expenditure by the person or
persons to whom the order or orders is or are directed of an
amount that exceeds, or of amounts that, in the aggregate,
exceed, $50,000.
(4) Where-
(a) on an application made under sub-section (I), the
Court is satisfied that a person has committed, or
been involved in, a contravention or contraventions
of a provision of Part 11; and
(b) an order has, or orders have, previously been made
under sub-section (1) against the person who
committed, or against a person who was involved in,
that contravention or those contraventions in respect
of another contravention or other contraventions of
the same provision, being a contravention which, or

4. Based on s80A Trade Practices Act 1974 (Cth).

 contraventions each of which, appears to the Court
to have been of the same nature as, or of a substantially
similar nature to, and to have occurred at or about
the same time as, the first-mentioned contravention
or contraventions (whether or not an order has, or
orders have, also previously been made under sub-
section (1) against any of those persons in respect of
another contravention or other contraventions of that
provision that was or were of a different nature or
occurred at a different time)-
the Court shall not, in respect of the contravention
or contraventions mentioned in paragraph (a), make
an order or orders under sub-section (1) that the
Court considers would be likely to require the
expenditure by the person or persons to whom the
order or orders is or are directed of an amount that
exceeds, or of amounts that, in the aggregate, exceed,
&heamount (if any) by which $50,000 is greater than
the amount, or the sum of the amounts that has or
have been or that the Court considers would be or be
likely to be, expended in accordance with the previous
order or previous orders first mentioned in paragraph
(b).
Three separate, but closely analogous, situations are dealt with in three
separate subsections. The fact that each is to be treated in much the
same way is lost in the maze of words. Subsections (2), (3) and (4) could
have been readily integrated in the following provision:
A Court may not make an order under subsection (1) if,
either alone or together with any other orders in respect of
contraventions which-
a) are of the same provision of Part 11; and
6) are of the same or a substantially similar nature; and
c) occurred at or about the same time,
it would be likely in the Court's opinion to require the
person or persons to whom it is directed to spend more than
$50,000.

Organisation problems

47 The second main type of defect in legislation is poor organisation of

material. The importance of organisation in the drafting of legislation
was well explained in a Study Paper published by the Canadian Law
Reform Commission in 1981:
the order in which the ideas in a discourse appear has more
than a merely aesthetic importance, for it also carries a
functional significance that is relevant, on the one hand, for
an understanding of the discourse, and on the other hand,
for retrieving the various elements. Indeed, a disorganized
 discourse, in which the writer presents his ideas without
following a logical sequence, has less of a chance of being
understood than a discourse in which the reader can follow
a certain chain of r e a s ~ n i n g . ~
Despite this fact, many Acts suffer from defects in organisation which
add to the difficulties already posed by the language in which they are
expressed. Indeed, there are occasions when the organisation of material
is so poor that it displaces language problems as the main cause of the
obscurity and incomprehensibility of legislation.

Within a single section

48 Example 1. In some cases, the problem arises within a single section.

Take the following example from the Life Insurance Act 1945 (Cth):
16 (1) A person or company shall not be deemed to carry
on any class of life insurance business by reason only-
(a) of collecting renewal premiums under a policy in
respect of that class of business issued outside
Australia to a person resident outside Australia at the
date of issue of the policy; or
(b) of making payments due under any such policy.
(2) Subject to the last preceding sub-section, a person or
company receiving premiums or proposals in respect of life
insurance business shall be deemed to be carrying on the
class of life insurance business to which the premiums or
proposals relate.
A person first reading subsection (1) would be mystified, because neither
the collection of the relevant premiums nor the making of the relevant
payments could possibly have the relevant, or indeed any, deeming
effect. The deeming provision itself has been missed out. It is found in
subsection (2). Subsection (1) makes no sense without it. The drafter
has dealt with an exception to a principle without first stating the
principle.
49 Example 2. Another example of poor organisation within a single
section is to be found in the Mental Health Act 1986 (Vic). Section 112
is headed 'Powers of inspection'. Subsection (1) entitles a 'community
visitory-a person appointed to make certain inquiries in relation to the
provision of mental health services-to inspect premises, see patients
and make other inquiries. Subsections (2) and (3) read:
(2) Where a community visitor wishes to perform or exercise
or is performing or exercising any power, duty or function
under this Act, the person in charge and every member of
the staff or management of the mental health service must
provide the community visitor with such reasonable

5 . Drafting Laws in French, 241.

32
 assistance as the community visitor requires to perform or
exercise that power, duty or function effectively.
(3) Any person in charge or member of the staff or
management of a mental health service who-
(a) unreasonably refuses or neglects to,render assistance
when required to do so under sub-section (2); or
(b) does not give full and true answers to the best of that
person's knowledge to any questions asked by a
community visitor in the performance or exercise of
any power, duty or function under this Act; or
(c) assaults, obstructs, hinders, threatens, intimidates or
attempts to obstruct or intimidate a community visitor
visiting a mental health service-
is guilty of an offence against this Act and liable to a penalty
of not more than 25 penalty units.
The location of these subsections is misleading. They are not limited,
as their location suggests, to requiring cooperation with a community
visitor in relation to the exercise of powers conferred by subsection (1).
They require cooperation with a community visitor in the performance
or exercise of any duty, function or power conferred under the Act. T h e
general functions of community visitors are set out in section 109. They
are considerably wider than those set out in section 112. Subsections
112 (2) and (3) should have been drafted as a separate section, with a
different heading, in order to avoid the risk of the mistaken inference
that they are only relevant to the exercise of the powers conferred by
subsection 112 (1).
50 Example 3. Perhaps the clearest example of the problems caused by
poor organisation of material within a single section is section 44 of the
Companies (Acquisition of Shares) (Victoria) Code. That section
prohibits the making of false or misleading statements in a wide variety
of documents produced by parties in an attempted takeover. Because of
the different types of documents and the different people who in each
case are responsible for them, it was necessary to create a number of
separate offences in respect of each type of document. Each had to
specify the people covered by it and the defences available to them.
51 Instead of exhaustively dealing with all aspects of each offence in turn,
the drafter first set out each of the offences in subsections (1) to (7). In
the case of the offences set out in subsections (4) to (6), the people who
may be guilty of those offences are identified in each case. Not so,
however, with the offences set out in subsections (1)-(3) and (7). In
each case, the person who may be guilty of an offence is identified only
by the phrase 'a person to whom this sub-section applies'. There is not
even a cross-reference to the provisions which give this phrase substance.
These appear as subsections (1 1) to (14) of section 44, some two or three
pages after the subsections to which they refer. T h e defences available
to the relevant people covered by subsections (1) to (7) are, in each case,
entirely separate from the provisions which they qualify. Instead, they
appear as subsections (16) and (17) of section 44. T h e consequence of
this organisation is that section 44 is little better than a jigsaw puzzle.
The provisions would be more easily understood if they were set out in
 tabular form, with the circumstances of each offence in one column
and the relevant persons and defences side by side in other columns.
The reader could then identify all the relevant information at once.
This format has been adopted in the plain English version of section 44
in Appendix 2.6

Within an act as a whole

52 Failure to highlight central message. If legislation is to be readily

intelligible, its central message should be introduced early in the
document. That is not generally done at present. A substantial amount
of technical material is included at the beginning of Acts. They
commence with a number of 'preliminary' sections. For example, the
preliminary sections of the Dangerous Goods Act 1985 (Vic) cover
commencement of the Act, definitions, the question whether the Crown
is bound by the Act, commencement of repeals and amendments noted
in the Schedule. The sections also include the continuation of existing
regulations and those repealed by the Act, the continuation of existing
legislation, the matters to which the Act applies and the adoption by
regulation of provisions of the Transport Code. Much, if not all, of this
material would be better placed elsewhere. The commencement
provision should be located at the back of the Act, as is already done in
several Canadian jurisdictions. The remainder of the preliminary
sections could also be relocated easily. That would enable a swifter
introduction to the central provisions of the legislation, with considerable
improvement in communication.
53 Even after dealing with 'preliminary matters', legislation often goes to
peripheral or less important issues before dealing with the central
provisions. Again, the Dangerous Goods Act 1985 provides an example.
Part 11, consisting of 10 sections, deals with the appointment and powers
of inspectors. The central requirements of the Act-those dealing with
licensing of people and with the requirements imposed on licensees
and other people to provide information to the Government and to take
care with respect to dangerous goods-follow in Parts 111, IV and V,
respectively. These should appear before Part 11. The appointment of
inspectors and the provision of information to the Government are not
ends in themselves. They simply facilitate enforcement of the Act's
main provisions.
54 But the Act's principal defect is its failure to state anywhere in Part I11
the people who are required to obtain a licence. Section 21 simply
indicates that a person is required to obtain a licence if the regulations
say so. One must then turn to section 52 in Part VII, which deals with
the power to make regulations. This refers to Schedule 2 of the Act.
Clause 27 of the Schedules ('Subject matter for Regulations') covers:

6. See also plain English version of s 39.

34
 ... requiring licences to be obtained by persons in relation
to-
(a) the manufacture, storage, sale, use, handling or
transfer of dangerous goods (other than in relation to
the storage, use, handling or transfer of dangerous
goods by a primary producer being dangerous goods
which are used or intended to be used in connexion
with the business of the primary producer and are
not held by the primary producer for the purpose of
resale);
(b) the transport of dangerous goods;
(c) the carrying out of work in respect of the installation,
alteration, repair, maintenance or testing of
equipment, piping, fittings or appliances which is or
are used or intended to be used for or in connexion
with dangerous goods;
(4 the import of explosives into Victoria;
(e) the sale of explosives; or
( f ) the assembling and blending of the inexplosive
component parts of any prescribed explosive
mixture-
and prescribing the conditions to be complied with before
licences can be issued.
55 Separation of related material. Another organisational problem within
an Act as a whole is the separation of closely related provisions. A
relatively straightforward example of unexpected separation of related
matters is found in the Companies (Acquisition of Shares) (Victoria)
Code. Company takeovers are conducted by two main methods: direct
offers to the shareholders; and indirect offers through a takeover
announcement to the stock exchange. Some provisions of the Code deal
with takeover offers; others with takeover announcements; still others
with both. The relevant provisions are set out in Parts 111, IV and V of
the Code, respectively. But the central provisions which define the
procedure to be followed in respect of takeover offers and takeover
announcements are located not where they might be expected to be
found, at the beginning of Parts 111and IV, but in Part 11, which defines
the circumstances in which shares may be acquired. One result is that
the central provision dealing with takeover announcements is physically
placed some 14 sections before those which, in conceptual order,
immediately follow it.
56 Another example is contained in the 'Uniform' Credit Act 1984. In a
commentary on the New South Wales version of the Act, Mr Warren
Pengilley, a Sydney solicitor, criticised the Act's organisation of the
material in the following terms:
The Act believes in 'the treasure trove' principle of statutory
interpretation. By this method, the draftsman drops clues in
certain sections of the Act which enable the astute seeker of
truth to see the possibility of the relevance of other sections,
 and thus by shuttling back and forth, hopefully to arrive at
the correct c o n c l ~ s i o n . ~
He illustrated the difficulties by attempting to answer the 'not
unreasonable question' whether a mortgage of goods is regulated under
the Act and, if so, what steps a mortgagee has to take to exercise the
power of sale:
... the following sections need to be studied before such
questions can be answered:
1. Is the mortgagee a credit provider?-s 5 (1) (a), (b), (c).
2. Is the credit for any transaction prescribed by the Act
or regulations as not being within the above?-see
government gazettes.
3. Is there a credit sale contract?-ss 5 (I), 13, 14, 16 and
various subsections of each, plus government gazettes
for classes of credit sale contract within the statutory
definition but prescribed as outside it.
4. If there is a credit sale contract, is it a regulated credit
sale contract?-ss 5 (I), 18, 30 (1) (b),(c).
5. Is there a loan contract?-ss 5 (I), 15, 16 and
government gazettes for classes of loan contracts within
the statutory definition but prescribed as outside it.
6. If there is a loan contract, is there a regulation loan
contract?-ss 18 (I), (2), 30 (2).
7. Is there a continuing credit contract?-ss 5 (I), 16,48
and various subsections, plus government gazettes for
classes of continuing credit contracts within the
statutory definition but prescribed as outside it.
8. If there is a continuing credit contract, is there a
regulated continuing credit contract?-ss 5 (I), 18 (I),
49 and various subsections.
9. Are there any orders under s19 exempting various
persons or classes of conduct?-see government
gazettes.
At this stage, one may pause and state that if question 4, 6
or 8 is answered positively and question 9 is inapplicable,
then the basic transaction is a regulated one. The next
question for the mortgagee is whether the mortgage is
regulated-something he can find out from an evaluation
of ss 5 (I), 18 (I), (2) and 89. An assessment then is required
as to whether the mortgage has invalidity aspects, which
requires searching at least through ss 98, 99, 100, 119 and
120. Our mortgagee can then find out from ss 106 (six
alternative possibilities), 107 (which may involve up to 29

7. W. Pengilley, Credit Act 1984, Longman Professional, Sydney, 1984, 12.

36
 alternative considerations), 110 (three alternatives), 115 (nine
alternatives) and 116 (12 matters for evaluation), how he
exercises his rights and what factors affect his d e c i s i ~ n . ~
Having written out a summary of the Act, Mr pkngilley still found it to
be incomprehensible:
Only when [I] put it on to a series of 'Computer Analysis
Flow Charts' did the legislation make any sense. This
analysis, however, took a period of many weeks. T h e cost to
the nation of lawyers, business persons and consumer advisers
going through this process must be astron~mical.~

8. At 12-13.
9. At 14. Similar criticism of the structure of the Credit Act was made by A.J.Duggan, Reader in
Law, University of Melbourne, submission, 25 February, 1987.
4. PLAIN ENGLISH AND OBJECTIONS TO IT
IN THE LAW

Nature of plain English

57 The drafting defects catalogued in the preceding chapter are not unique
to legislation. Other legal documents examined by the Commission
contain equivalent or analogous defects.' These defects can only be
eradicated by the adoption of a plain English approach to
communication. 'Plain English' involves the use of plain, straightforward
language which avoids these defects and conveys its meaning as clearly
and simply as possible, without unnecessary pretension or
embellishment. It is to be contrasted with convoluted, repetitive and
prolix language. The adoption of a plain English style demands simply
that a document be written in a style which readily conveys its message
to its audience. However, plain English is not concerned simply with
the forms of language. Because its theme is communication, it calls for
improvements in the organisation of the material and the method by
which it is presented. It requires that material is presented in a sequence
which the audience would expect and which helps the audience absorb
the information. It also requires that a document's design be as attractive
as possible in order to assist readers to find their way through it.

Objections to plain English in legal drafting

58 During the course of its work on the reference, the Commission was
confronted with a number of specific objections to the adoption of a
plain English policy in relation to legislation and other legal documents.
The rest of this chapter examines each of these objections. The
conclusion reached is that they are based on misunderstandings
concerning the nature of plain English and the objectives of those who
advocate it.
a. 'Plain English involves a debasement of the language'.
59 It would certainly be a debasement of language if Shakespeare's

1. Appendixes 4 and 5.

39
 I'll call thee Hamlet,
King, father, royal Dane: Oh answer me,
Let me not burst in ignorance; but tell
Why thy canoniz'd bones hearsed in death,
Have burst their cerements, why the sepulchre
Wherein we saw thee quietly inurn'd
hath op'd his ponderous and marble jaws,
T o cast thee up again?2
were to be translated as
What are you doing out of your coffin, Dad?
We buried you the other day and you're supposed to be dead,
Don't keep me waiting!
I'm bursting to know.3
The message conveyed by the translation is a poor shadow of the original.
It has lost its sense of the awful solemnity of Hamlet's meeting with his
dead father. It has none of the elegance of the original and generates
no aesthetic pleasure.
60 But legal documents are functional documents, not literary ones. Their
aim is to establish, add to communicate information about, rights,
duties, benefits and burdens. They are not intended to be works of art,
to convey atmosphere or to generate aesthetic pleasure. That is not to
say that they may be written clumsily or inelegantly. Like convolution
and prolixity, clumsiness and inelegance detract from the efficiency
with which a document communicates its message. Like convolution
and prolixity, they are inconsistent with plain English. Writing legal
documents in plain English requires direct and clear expression. It does
not involve any debasement of the language.
b. 'Plain English is incompatible with precision'.
61 For lawyers, accuracy and precision are fundamental. Adoption of a
plain English policy in relation to legal drafting would be unacceptable
if it involved a change in the intended allocation of rights and duties or
if it made a clear document ambiguous. Some responses to the discussion
paper pointed out that statements in plain language can lead to
uncertainty because of their lack of precise meaning. Section 92 of the
Commonwealth Constitution was given as an e ~ a m p l e : ~
Trade commerce and intercourse between the States shall
be absolutely free.
Section 92 has given rise to a large amount of litigation aimed at
determining how it applies in particular situations. But it is quite wrong
to blame the simplicity of its language. The fault (if it be a fault) lies
with the lack of precision of the Founding Fathers in developing the

2. Hamlet, Act I, Sc iv.

3. G.A. Hackett-Jones, Submission, 3 December, 1986.
4. The examples given by I.M. Turnbull ('Problems of Legislative Drafting', [I9861 Statute Law
Review 67 at 69) are in much the same category. In each case, the criticism is of a failure to
express a developed policy. Mr Turnbull does not use them to cast doubt on plain English, but
on the abbreviated form of Continental drafting.
 policy which lay behind section 92. If the policy had been more detailed,
the section would certainly have been longer. Much of the litigation
which has followed would have been avoided. But the detailed policy
could still have been expressed in simple language. The fact that
statements in plain language can lead to uncertainty when they express
an imprecise policy is irrelevant to the question of the utility of a plain
English approach to legal writing in general.
62 Other critics of the plain English movement have strenuously maintained
that clarity and precision are inconsistent goals. The 1984-85 Annual
Report of the Commonwealth Office of the Parliamentary Counsel
states that:
Critics of legislative drafting fail to appreciate that the reason
that even a well-drafted law may be difficult to understand
(even to an expert on the subject matter of the law) is that
the law has to be unambiguous. This contrasts with literary
English where the main object of the writing is to convey an
idea readily to the reader and it does not matter that it may
not be conveyed precisely. The drafter of legislation is not
likely to receive any thanks from the Government for drafting
a law that is easily comprehensible but is imprecise. As Sir
Ernest Gowers pointed out in The Complete Plain
Words, ... [Ilack of ambiguity does not go hand in hand with
intelligibility, and the nearer you get to the one, the further
you are likely to get from the others5
63 This statement, like other similar ones, begs the question whether
accuracy and intelligibility really are inconsistent goals. The authority
relied upon is certainly an impressive one. Sir Ernest Gowers has been
described by Professor Robert Benson, an advocate of plain English, as
'the patron saint of sensible writing'.6 Yet, in a chapter entitled 'A
Digression on Legal English', Gowers argued that the reason for the
peculiarities of legal English lay in the necessity not to be unambiguous:
That is by no means the same as being readily intelligible;
on the contrary, the nearer you get to the one, the further
you are likely to get from the other ... It is accordingly the
duty of a draftsman of these authoritative texts to try to
imagine every possible combination of circumstances to
which his words might apply and every conceivable
misinterpretation that might be put on them, and to take
precautions accordingly. He must avoid all graces, not be
afraid of repetitions, or even of identifying them by
aforesaids; he must limit by definition words with a penumbra
dangerously large, and amplify with a string of near-
synonyms words with a penumbra dangerously small; he

5. At 250. Similarly, Sir John Rowlatt's aphorism 'the intelligibilityof a Bill is in inverse proportion
to its chance of being right'. See Sir Harold Kent, In on the Act, McMillan, London, 1979, 97.
Whether precision and a lack of ambiguity are in fact achieved by the present style is questionable.
Compare D. Mellinkoff, The Language ofthe Law, Little Brown & Co, Boston, 1963,293f.
6. R. Benson, 'The End of Legalese: The Game is Over', (1985) 13 Review of Law &' Social
Change, 519, 559.
 must eschew all pronouns when their antecedents might
possibly be open to dispute and generally avoid every
potential grammatical ambiguity.'
64 Commenting on this passage, Benson stated that it was 'as if the Sunday
preacher has unveiled himself as Judas I~cariot'.~Gowers was, of course,
a lawyer and a civil servant. Like many lawyers, he appears to have been
seduced by the claim of parliamentary counsel that clarity must be
sacrificed to precision. Benson rightly compares Gowers' defence of
this claim with the response made by the Swiss clockmaker to the
mayor's criticism of a clock of great precision which had been installed
in the tower on the main square:
'But Johann,' complained the mayor, 'the clock has no hands
or numbers and the citizens cannot tell the time?
'I give you the finest precision-instrument in Europe,'
grumbled Johann, 'and you are ungrateful. Besides, if the
citizens want to know the time, they can pay me to climb
the tower, inspect the workings, and announce it.'
As Benson points out, Gowers was guilty of sleight of hand in altering
the concept of precision by removing from it the requirement of
communicability. It is hardly surprising to find that Gower's 'Digression'
was removed by a subsequent editor9 and that the treatment of legal
English as a separate dialect has been all but abandoned in the most
recent edition.1°
65 In fact, precision and clarity are not competing goals. Precision is
desirable in order to minimise the risk of uncertainty and of consequent
disputes. But a document which is precise without being clear is as
dangerous in that respect as one which is clear without being precise.
In its true sense, precision is incompatible with a lack of clarity. As
Thornton says:
The purposes of legislation are most likely to be achieved by
the draftsman who is ardently concerned to be intelligible.
The obligation to be intelligible, to convey the intended
meaning so that it is comprehensible and easily understood
by the affected parties, is best satisfied by writing with
simplicity and precision ... A law which is drafted in precise
but not simple terms may, on account of its
incomprehensibility, ... fail to achieve the result intended.
The blind pursuit of precision will inevitably lead to
complexity; and the complexity is a definite step along the
way to 0bscurity.l

7. The Complete Plain Words, 1st ed, Pelican, London, 1954,18-20.

8. R. Benson, 'The End of Legalese: The Game is Over', (1985) 13 Review of Law 6 Social
Change, 5 19, 560.
9. Fraser, 2nd ed, 1972.
10. Greenbaum & Whitcut, 3rd ed, 1986.
11. G.C. Thornton, Legislative Drafring, 3rd ed, Butterworths, London, 1987,49.
 In summary, neither precision nor simplicity should be sacrificed at the
altar of the other.12
Despite all this, the view that the adoption of plain English is inconsistent
with achieving the required degree of legislative precision is a persistent
one. A number of submissions13pointed to the fact that the Commission's
earlier attempts to redraft particular legislative provisions in plain
English had in several cases failed to reproduce the detail contained in
the originals. Some submissions attributed this to the tension between
precision and clarity. In the Commission's view, that is not correct. The
errors found in the earlier drafts resulted from difficulties in establishing
the exact meaning of the original. Once that was done, the errors were
readily corrected without departure from a plain English style.14 The
same is true of the plain English version of the Companies Acquisition
of Shares (Victoria) Code in Appendix 2. Considerable effort has gone
into reproducing the detail of the original. If some detail has been
missed, it could readily be included without affecting the style of the
plain English version. It would not be necessary to resort to the
convoluted and repetitious style of the original, nor to introduce the
unnecessary concepts which it contains. Any errors in the plain English
version are the result of difficulties of translation, particularly difficulties
in understanding the original version. They are not inherent in plain
English itself. Ideally, of course, plain English should not involve .a
translation. It should be written from the beginning. In that event, all
necessary detail would be included automatically in the draft Bill. There
would be no question of a failure to reproduce the precise amount of
detail required.
c. 'It is impossible to draft complex laws which are intelligible
to the average citizen.'
Underlying this objection is a misconception concerning the audience
of legislation. The view of many drafters is that they should draft with
prime concern for lawyers and judges.15 Clearly lawyers must have
access to an intelligible text in order to advise their clients. Similarly,
judges must be able to understand legislation in order to construe and
apply it. But that does not mean that a law is satisfactory if it is intelligible
to lawyers and judges. Lawyers and judges are an important audience,
but they are a secondary one.
The primary audience of draft legislation is Parliament.16 Parliament
bears the ultimate responsibility for the language used in an Act. An
Act contains only what Parliament has approved. But Members of
Parliament must themselves read Bills if they are to vote on them. If
they are not readily comprehensible, parliamentary time may be wasted

For example, P. Balmford, submission, 7 November, 1986; G. K. Kolts, submission, 19 December

1986; I.M.Turnbul1, submission, 18 March 1987.
See, for example D. St. L. Kelly, 'Legislative Drafting and Plain English', (1987) 10 Adelaide
Law Review, 409,415,418.
For example, E. Driedger, 'Legislative Drafting', (1949) 27 Canadian Bar Review, 296.
Parliament is not the only audience, however. The community is also interested in proposed
legislation.
 and the Government's legislative program interfered with. Worse still,
laws may be enacted without Members fully understanding and
appreciating their significance. Parliament regularly has to grapple
with complex content. It should not also have to struggle with obscure
language.
69 Once a Bill has been passed, the primary audience is the group of people
who are affected by it and the officials who must administer it. A clear
statement of the law is necessary if citizens are to be aware of their
rights and obligations. It is also necessary if the officials who administer
the law are to do so properly. When Parliament passes a law applying to
citizens or to a selected group of citizens, its prime concern is not with
the reaction of judges or lawyers or even administrators. Its prime
concern is with the conduct of the citizens whom it regulates or on
whom it imposes burdens or confers benefits. That is not to say that
drafters should not be concerned with accuracy and precision. They
certainly should. But the prime aim should be to ensure that those to
whom the law is addressed act in accordance with it. The law should be
drafted in such a way as to be intelligible, above all, to those directly
affected by it. If it is intelligible to them, lawyers and judges should have
no difficulty in understanding it and applying it.
70 The correct relationship between drafter and audience has been
admirably described by Thornton. He distinguishes between three groups
to whom the communication of a law is relevant: (1) the members of
the law-making authority, (2) the members of society who are concerned
with or affected by the law, and (3) the members of the judiciary. He
continues:
It is unrealistic to believe that laws should be drafted in
language and in a style which is familiar and instantly
intelligible to the man in the street. Nevertheless the
draftsman must in each case endeavour to draft in such a
way that the law is successfully communicated to the persons
who make up the three groups. Legislation having a high
technical content may not be fully understood by groups 1
and 3, at least without comprehensive technical explanation.
This is inevitable. A law to regulate radio communication
may justifiably contain phrases such as 'intermediate
frequency gain' and 'sinusoidal tones' and other phrases
equally meaningless to most people. What is vital is that the
words be chosen and a style adopted which those whose
interests are affected (i.e. group 2) should be able to
comprehend without unnecessary difficulty. Technical
purposes are likely to require technical words and technical
law may still be good law, even if unintelligible to most
people, so long as it achieves ready communication with
those who matter so far as that law is concerned.
On the other hand, because in its application to some
specialist areas legislation must be virtually unintelligible to
most people, that does not provide the slightest justification
for widespread unintelligibility. The style of legislation
should deviate from common language only when a specialist
topic requires.
 Even in such cases, the style should deviate from common
language no more than is made necessary by the technical
content. This principle cannot be emphasised too strongly.17

71 The plain English movement does not require that laws always be
drafted in such a way as to make them intelligible to the average citizen.
However, it does require that every effort be made to make them
intelligible to the widest possible audience. There is no justification for
the defects in language and structure which were noted in Chapter 2
and which sharply reduce the range of people who are capable of
comprehending a document. Many legal documents are written in such
a way that not only the people to whom they are directed but also judges
and skilled lawyers have extreme difficulty in comprehending them. In
such a case, it is not unfamiliarity with the subject matter or a lack of
technical knowledge which causes the problem; it is the language and
structure of the document itself. These should be improved, not in the
hope of making the document intelligible to the average citizen, but in
order to make it intelligible-and immediately intelligible-to as many
of those as possible who are concerned with the relevant activities.

This point has not always been fully appreciated. In its 1984-85Annual
Report, the Commonwealth Office of Parliamentary Counsel stated that
plain English criticisms of legislative drafting styles appeared to be
based on the mistaken belief that all statutes should be able to be
expressed in simple language capable of being understood by the average
citizen. Professor Robert Eagleson was cited as one person who holds
such a view. In fact, he does not. Writing of the effect which the
adoption of a plain English policy would have, Professor Eagleson said
that:

An advanced text on cancer or a law about the ownership of

shares ... will remain complex. But the complexity will reside
solely in the subject matter, and not be compounded by
difficulty in language. For it is an error to assume ... that
difficulty in context must be matched by difficulty in
language ... complexity in subject matter does not call for
complicated, convoluted language.18
A similar point was made in the discussion paper.19 It is re-emphasised
here. The Commission's criticisms of the traditional drafting style are
not based on the view that all statutes can be expressed in simple
language capable of being understood by ordinary citizens. They are
based on the view that style decreases the number of persons who can

17. G.C. Thornton, Legislative Drafting, 3rd ed, Butterworths, London, 1987,44-45.
18. Sydney Morning Herald, 20 January 1985,8.
19. Paragraph 25.
 understand statutes by imposing unnecessary barriers in the way of
comprehension.
d. 'There often isn't suficient time to draft in plain English'.
73 The proposition that it takes more time to write clearly than to write
obscurely is neatly put in the remark made by the famous seventeenth
century mathematician and philosopher, Blaise Pascal: 'I am sorry that
this letter is unusually long. I did not have enough time to write a
shorter one.'20Much the same view was adopted by the Commonwealth
Attorney-General's Department in response to criticisms made by
members of the Commission in relation to the drafting of certain
provisions in the Takeovers Code and Futures Industry Act 1986:
No doubt, given opportunity or time, there would be scope
for simplification ... [While] the [plain English] provisions
are more readable ... they have the advantage and result
from the editing of a completed text. This is a far less
arduous task than that confronting the original draftsman
who had to formulate the total text under considerable time
pres~ures.~~
74 Legislative drafting is certainly subject to time constraints. The time
given to prepare drafts is often inadequate. Ministers and instructing
officers sometimes make radical changes to the policy which has been
incorporated in earlier drafts. Amendments are sometimes passed in
Parliament at short notice. As Sir George Engle, former First
Parliamentary Counsel in the United Kingdom, has said:
for too many Bills, the time left for serious work on their
preparation is less, and for large and difficult Bills often far
less, than the minimum time needed to do the job
satisfactorily. Instructions may have to be sent before the
policy is finally settled. Drafting too often has to begin on
the basis of partial or incomplete instructions. And if the
requirements of the Parliamentary timetable make it
necessary for a particular Bill to be introduced at the earliest
practicable moment in the session, the draftsman may find
himself hard put to it to produce a Bill at all in the time, and
is most unlikely to be allowed the luxury of a period of calm
in which to consider how the drafting could be improved.
Given time, the draftsman of a Bill can nearly always perceive
ways in which its structure and wording could be bettered;
but this is not something that can be done in a rush.22
The very process by which drafts develop is such as to make continuous
redesign of a Bill impracticable:

20. Lettres Provinciales (1657), xvi; cited by I.M. Turnbull, Legislative Drafting-Use of Plain English,
1986, 5.
21. Drafting styles, policy formulation and the role of the Courts with reference to the Takeovers Code,
12 September 1986, 18.
22. G . Engle, 'Bills are made to pass as razors are made to sell: Practical constraints in the preparation
of legislation', [I9831 Statute Law Review 7,14.
 In the early stages it may be comparatively easy to redesign
each successive draft to fit the latest version of what is wanted;
but as each successive draft embodies a larger proportion of
material that has been seen and commented on by the various
departments interested in the Bill, it becomes more and
more difficult, in the time available before introduction, to
make radical changes in the way the Bill is drafted, since to
do so would mean taking to pieces many provisions which
have been generally agreed.
Once the Bill has been introduced, there is little enthusiasm
for redesign for redesign's sake. Yet, in the case of nearly all
complex or controversial Bills, the process of amendment
goes relentlessly on; and though the draftsman can sometimes
achieve a measure of redesign in the course of preparing
government amendments to the Bill, his ability to do
anything radical in this line is limited by the fact that it is
usually not until the Bill is nearing the end of its course that
its ultimate content becomes settled in substance-and by
then Ministers are not only reluctant to disturb provisions
which have emerged from earlier stages of the Bill, but are
also ... unwilling to devote valuable time on the floor of the
House to amendments which are not strictly necessary.23
75 There can be little doubt that pressures of time and the process involved
in refining draft legislation militate against coherence of structure and
form. But not all legislation is subject to such pressures. As Benson says:
even statutes ... are initially conceived in silent minds and
quiet rooms and have a gestation period of many months. It
is only the moment of birth of these documents that tends
to be quick and violent. If the prose is clear and simple from
conception through gestation, chances are that a good deal
of clarity and simplicity will survive the birth.24
Moreover, it is by no means clear that the reason for legislative obscurity
lies in a lack of time for a final edit of the material. In the Commission's
view, the reason is more deep-seated than that. Some drafters fail to
recognise the needs of the various audiences to whom the legislation is
directed. They follow established styles and drafting conventions which
legitimise excessive caution, repetition and convolution. They see no
need for the type of editing which is necessary to remove or minimise
obscurity. They lack a forum for reassessing long-held assumptions
about legislative drafting.
76 If these factors were considered during the early drafting stage of a new
Bill or an amendment to an existing one, there would be little need for
a final edit of legislation to produce a clear version. Indeed, there would
be considerable savings in time and substantial opportunities for
increased productivity. The amount of writing required by the present

24. R. Benson, 'The End of Legalese: The Game is Over', (1985) 13 Review of Law Sm'al
Change, 519,568.
 style is typically more than twice that required by a plain English style.
The writing time saved should more than compensate for any additional
time which might be required to write more directly and concisely.
77 In any event, the assertion that it takes longer to write in plain English
is a doubtful one. It seems to assume that legislation has to be written
in traditional legal language and then 'translated' into plain English.
That is wrong. Legislation can, and should, be written in plain English
from the start. In fact, traditional legal writing is, in some cases at least,
a clumsy collation and translation of plainer originals. Much legislation
is long-winded. Sentences run on, sometimes for hundreds of words.
They consist of numerous clauses entwined in and entangled with other
clauses. No one could possibly produce such sentences in an initial
draft. They must have started as a series of short sentences which were
gradually merged; or even as one simple sentence to which qualification
upon qualification was added.
78 Writers often begin plainly but then work through a series of revisions
to produce an inflated version. Take the development of a section in a
report of a Commonwealth authority dealing with housing loans. In an
early draft, it stated:
The Commission gives equal consideration to joint applicants
where the partner is non-Aboriginal.
It was then expanded into:
Consistent with the provisions of the Act, the Commission
gives equal consideration to joint applicants where the
partner is non-Aboriginal.
It finally ended up as:
Consistent with the provisions of the Act, the Commission
gives equal consideration to joint applicants where one
partner is non-Aboriginal. The children of mixed marriages
are regarded as Aboriginal and benefit from the provisions of a
stable environment.25
79 Similar revision of a simple statement must have led to the following
description by a government accounts officer of the procedures for a
publications division of a Commonwealth Government Department:
It should be borne in mind that the annual publishing
program consists of not only those publications scheduled
for printing during 1984-85 but also those publications which
will be paid for during 1984-85, i.e. publications which are
not expected to be delivered to the AGPS until May or June
of this year should be included in your 1984-85 program.
Notwithstanding this, those publications which you expect
to deliver to the AGPS during May and June of 1985 should
be included in the 1984-5 program.

25. Australian Aboriginal Development Commission, Annual Report, 1981-82, AGPS, Canberra,
23.
 Thankfully, the writer explained what was meant in a postscript.
P.S Above is very long-winded. Maybe we could just say
that the service covers May 1984 to June 1985 when
material is delivered to the AGPS.
If a plain English policy were adopted in relation to legal writing, the
long-windedness created by revision of simple statements could be
avoided. Less time, not more, would be required for drafting a document.
There would be substantial savings for the whole community.
e. 'Plain English would lead to uncertainty through the loss of
words and phrases whose meanings have been settled by
judicial interpretation'.
80 The concern over the loss of established and precise meanings for many
legal words and phrases is understandable. As Prather said:
Legal language gradually has become precise and relatively
certain; when a word, term or phrase is used in a contract,
and that contract has been the subject of judicial
interpretation, the precise meaning of the words therein has
become more certain or determinable. Thus, one can depend
upon what the particular words mean (or certainly what they
do not mean) because a court has ruled, and probably would
rule in the future, that they mean just that.26
In fact, however, there are relatively few words and phrases which have
been subject to the type of detailed interpretation which this argument
assumes. Professor Mellinkoff examined at length the question whether
the vocabulary of the law is precise. His conclusion was that only a tiny
part of the language of the law was technical and precise:
The defect in the dogma of precision is that it claims too
much. Law language is but rarely precise. In a few
particulars, 'Yes'; as a whole pattern of communication,
'No'. And it is as important to the lawyer to make himself
aware that his language is not generally precise as it is for
him to know the precision that is there.
If the language of the law is stripped first of its overwhelming
mass of ordinary English ... and next of the repeated words
and phrasings of tradition ... precedent, and requirement
which are occasionally precise but only by coincidence, there
still remains a distinctive nubbin of precision. It is achieved
by the discriminating use of terms of art and some of the
law's argot and by a striving for precision-for limitation of
meaning, a striving that can be detected in the works of
draftsmen of every degree of competency.
This small part-this precise part-of the language of the
law is almost lost in any given square foot of law language.
Put to better use, with some of the dross skimmed off, the

26. W. Prather, 'In Defence of the People's Use of Three Syllable Words', (1978) 39 Alabama
Lawyer, 394, 395; cited in R. Benson, 'The End of Legalese: The Game is Over', (1985) 13
Review of Law 6'Social Change, 5 19, 561.

49
 precise part could make a better showing. As it is, the
sprinkling of precision is no more representative of the whole
than the nuggets in a slated gold field.27
Plain English does not require that this 'small part', this 'precise part'
of legal vocabulary be abandoned. It recognises that a technical
vocabulary has developed and that it could not be eradicated without a
loss of meaning. But that does not justify the retention of the convolution,
repetition and overwriting which now characterise legal writing. They
could be removed without any loss at all to precise expression.
f. 'Plain English has only a limited role in relation to documents
establishing rights and dutiesJ.
81 Several submissions suggested that the discussion paper indicated that
the Commission had not adequately appreciated the differences between
different types of legal writing.28Legislation and private legal documents
create rights and duties. Other writings do not. They are simply
explanatory in nature. Some of the submissions accepted that plain
English is important in relation to explanatory texts. But they went on
to argue that it has only a limited role in relation to documents creating
rights and obligations, the precise statement of which might be
prejudiced by plain English.
82 This objection is based on a misunderstanding of the aims of the plain
English movement. It assumes that plain English involves a loss of
precision, partly, no doubt, through the loss of a peculiarly legal
terminology. T h e falsity of that assumption has already been
d e m o n ~ t r a t e dPlain
. ~ ~ English does not involve a loss of precision. Nor
does it require rejection of legal terminology. It demands simple
straightforward statements, the avoidance of repetition and an
economical use of words. None of that is incompatible with the retention
of precision and of technical legal words which lack a substitute in
everyday language. Although statutes and private legal documents which
create rights and obligations are subject to certain technical rules, they
are subject to the same rules of grammar and structure as other legal
documents.
83 '
That is not to say, however, that explanatory texts should not be used.
There may well be value in using them in relation to complex legislation
in particular. There is, of course, a risk that simplified explanatory texts
may not accurately reflect the originals and may, to that extent, mislead
their audience. Nonetheless, they are likely to reach a wider audience
than the originals, and to be more widely used than other means of
informing the public. As one submission put it:
the eradication of the structural and linguistic vices that
disfigure and obscure so much statute law would make it
intelligible to a wider audience. But even so, there would be

27. D. Mellinkoff, The Language ofthe Law, Little Brown & Co, Boston, 1963, 388.
28. For example, Francis Bennion (the renowned English critic of legislative drafting), submission,
8 October 1986; R. M. Armstrong (Chief Parliamentary Counsel for Victoria), submission, 22
December 1986.
29. Paragraph 80.
 a substantial section of the public to which the law would
remain incomprehensible in statutory form. The people who
comprise this group have difficulty in coping with the degree
of abstraction that is necessarily involved in the statement of
legal principles. If we want them to understand the
significance of a law, we need to link the legal principles
embodied in the law to situations in real life with which
they can identify; we need to show them how the principle
operates in those situations. For this purpose, radio and
television are much more effective mediums of
communication than the written
The Commission agrees that more could be done to inform the public
of the content of legislation, either by explanatory text or by the use of
radio and television. But that is not a matter for report by the
Commission. The primary task is to improve the quality of legislation.
Only then will it be possible to identify what more needs to be done in
relation to explanatory texts and other forms of publicity.
g. 'Plain English cannot succeed without a new approach to
statutory interpretation '.
84 This objection is based on a fear that judges, in particular, will fail to
appreciate the significance of a change to plain English drafting. They
will continue to interpret legislation and other legal documents on the
basis that they have been drafted to cover the finest of detail; if gaps
appear to have been left, they must have been intended. One answer to
this objection is that many, if not most, of the changes produced by
adopting a plain English style could not give rise to the risk on which
the objection is based. The shortening of sentences, the removal of
repetition and circumlocution, and improvements in the structure and
layout of legislation involve no loss of detail and create no gaps. The
only change which may create a risk of misunderstanding by judges is
the abandonment of attempts to spell out each particular case covered
by the legislation and the adoption, instead, of words of more general
coverage.
85 In many cases, that approach is no more likely to give rise to
misunderstandings than the one it is intended to replace. A prohibition
against 'assaulting, obstructing, hindering, threatening or intimidating'
another person raises doubt about whether 'impeding' or 'delaying' that
person is also covered. Lawyers and judges may feel obliged to determine
the precise coverage of each of the terms used and gaps may result
which bear little relationship to the policy which the words are intended
to implement. That risk would be avoided if a more general phrase,
such as 'interfering with' were used instead.
86 However, the use of general expressions in place of the listing of
particulars may give rise to difficulty in some cases. Lawyers have a
tendency to restrict the coverage of general expression. The term 'power',
for example, undoubtedly covers a power which is given expressly but

30. G.A. Hackett-Jones,submission, 3 December 1986.

 may not cover one given by implication. It obviously covers lawful
power, but may not cover a power whose exercise involves a breach of
the law. This tendency to read down the ambit of general expressions is
detrimental to clarity. Drafters are sometimes led to pile qualification
upon qualification to counteract it. Take section 9 of the Companies
(Acquisition of Shares) (Victoria) Code. That section deals with relevant
interests in shares. Subsection (1) states that a person has a relevant
interest in a share if that person has power to control its disposal or to
control the exercise of the right to vote attached to it. Subsections (2)
and (3) continue:
(2) It is immaterial for the purposes of this section whether the
power of a person-
(a) to exercise, or to control the exercise of, the right to
vote attached to a voting share; or
(b) to dispose of, or to exercise control over the disposal
of, a share,
is express or implied or formal or informal, is exercisable alone or
jointly with another person or other persons, cannot be related to a
particular share, or is, or is capable of being made, subject to restraint
or restriction, and any such power exercisable by a person jointly
with another person or other persons shall, for those purposes, be
deemed to be exercisable by either or any of those persons.
(3) A reference in this section to power or control includes a
reference to power or control that is direct or indirect or is, or is
capable of being, exercised as a result of, or by means of, or in breach
of, or by revocation of, trusts, agreements, arrangements,
understandings and practices, or any of them, whether or not they
are enforceable, and a reference in this section to a controlling
interest includes a reference to such an interest as gives control.
87 The extent to which all these points would be covered by a general
expression is a matter for judgment. 'Any kind of power whatever'
might appear to cover all of them. Nonetheless, there is a danger that
some powers would escape the net. In its rewrite of the Companies
(Acquisition of Shares) (Victoria) Code, the Commission recognised
this point. It qualified the word 'power' in the definition of 'relevant
interest' in clause 3 of Schedule 2, adding:
of any kind (however it arises and whether it may be exercised
alone or jointly, including a power that is subject to restraint
or restriction or whose exercise involves a breach or
revocation of a trust, understanding or practice) ...
The Commission's recognition of the risks associated with the use of
general expressions did not require a retreat to the exhaustive listing
method used in the original. Moreover, section 9 is an extreme example
of the difficulty. In many cases, the risk of lawyers and judges reading
down a general expression is much less than it would have been in
relation to the word 'power' in section 9. In those cases, the requirement
 that courts adopt a purposive approach to interpretation31should ensure
that plain English has no adverse effect on the intended coverage of the
relevant provision.
88 The example in the preceding paragraph indicates how the objection
being considered should be met. Those who wish to substitute clear
statements of principle for a list of particulars must be careful to ensure
that the statement of principle clearly covers each of the particular cases
that it is intended to cover. They must also ensure that the statement of
principle does not cover particular cases which it is not intended to
cover. Errors are possible. But they are also possible in the method
which relies on particulars rather than principle.
89 Whether there is a need to modify particular rules of interpretation is
more difficult to assess. It is important to recognise, however, that many
of the so-called 'rules' of interpretation are really only maxims. They
suggest possibilities; they do not require results. The possibilities which
they suggest are dictated by commonsense. Take the ejusdem generis
maxim as an example. This states that a general phrase following a list
of particulars may be limited to particulars 'of the same class' as the
ones listed. Consequently 'or any other bird' after 'sparrow, starling,
blackbird' may be limited to introduced birds. This possibility is apparent
enough. It is suggested by the particulars themselves. The maxim would
be unaffected by a plain English approach to drafting. So, too, would
other maxims, including noscitur a sociis (it is known by its associates),
expressio unius est exclusio alterius (express mention of one thing implies
the exclusion of another) and generalia specialibus non derogant (general
provisions do not detract from particular ones). Their only magic is in
the language of their labels.
90 There are, however, other rules of interpretation which might possibly
impede total acceptance of a plain English drafting style. The
Commission has in mind those 'rules' of interpretation which call for a
narrow construction of certain types of legislation. They include the
'rule' that penal provisions should be construed narrowly and the
presumption that legislation is not intended to derogate from
fundamental principles of the common law and is not intended to take
away common law rights. On bases such as these, courts have sometimes
read legislation so narrowly that its purpose has been defeated. One
example is Great Fingall Consolidated Ltd v S h e e h ~ n That . ~ ~ case
concerned the question whether an employee could 'compromise' his
rights to compensation under the Act by accepting that an amount paid
to him was in full settlement of his claim. Both Griffith CJ and O'Connor
J referred to the common law presumption against interference with
common law rights. Griffith CJ could see no reason why the Workers
Compensation Act should be taken to deprive a worker of his entitlement
to release or compromise claims against his employer-despite the fact
that the aim of the Act was to ensure the payment of adequate
compensation, and to prohibit contracting out of its provisions.

31. s35 Interpretation of Legislation Act 1984 (Vic); sl5AA Acts Interpretation Act 1901 (Cth).
32. (1906) 3 CLR 176.
91 The rule that penal provisions should be construed narrowly, like the
presumptions against derogation from fundamental principles of the
common law and against the taking away of common law rights,
developed during the period when statutes were regarded as an unusual
method of lawmaking and an unwelcome intrusion on the common
law. While those days have now passed, neither the 'rule' nor the
presumptions need to be discarded. Like maxims, they do not require
particular results. They simply serve as a warning that certain values
are deeply imbedded in the law and that it would be surprising if
Parliament were to reject those values without saying so in quite clear
t e r m ~ . ~On
3 this basis, they pose no particular problem for plain English
drafting. They simply call for clear expression when it is intended to
impose criminal liability on a person or to depart from previously
recognised principles. The risk that they will be used to frustrate the
legislative intention has all but disappeared with the passage of section
15AA of the Acts Interpretation Act 1901 (Cth) and section 35 of the
Interpretation of Legislation Act 1984 ( V ~ C ) . ~ ~
92 The interpretation of private legal documents is subject to many of the
rules and maxims that apply to the interpretation of legislation. However,
there are significant differences. One arises from the fact that recent
Commonwealth and Victorian legislation requiring a purposive
approach to interpretation and allowing for use to be made of extrinsic
material applies exclusively to legislation. Even so, the interpretation of
private legal documents now generally proceeds on a purposive basis.
Moreover, the original rule prohibiting reference to facts and
circumstances outside the document being interpreted has been largely
consumed by exceptions.35 It would be possible to supplement these
developments by legislation, but there is no obvious need to do so. The
Commission is not aware of any recent evidence that the courts lack the
required degree of flexibility in their approach to the interpretation of
private legal documents.36

33. R v Bolton; Ex parte Beane (1987) 70 ALR 225.

34. These sections do not, however, require that an interpretation be accepted merely because it is
suggested by the extraneous material. See R v Bolton; Ex parte Beane (1987) 70 ALR 225,227-
229 (Mason CJ, Wilson and Dawson JJ);238 (Deane J).
35. See, for example, Antaios Compania Naviera SA v Salen Rederierna AB [I9851 AC 191, 200,
201.
36. K. Lindgren, J. Carter & D. Harland, Contract Law in Australia, Butterwonhs, Sydney, 1986,
paragraph 723.
5. THE IMPORTANCE OF PLAIN ENGLISH

93 Plain English is important because it improves communication.

Improved communication increases information and decreases the need
for interpreters. In the legal system, adoption of a plain English approach
would have two main benefits. First, it would contribute to the rule of
law by decreasing the risk of unintentional breaches of the law, and of
legal obligations, resulting from ignorance or misunderstanding.
Secondly, it would decrease the costs associated with the administration
and application of legislation and other legal documents.

The Rule of Law

Problems created by poor drafring

94 Laws confer benefits and impose obligations on people. If laws are not
written in clear and easily comprehensible language, those who are
affected by them may be deprived of those benefits or fail to discharge
their obligations. But laws are rarely written as plainly as they might be.
In 1950, Lord Radcliffe commented on legal language by saying that:
a sort of hieratic language has developed by which the priests
incant the commandments. I seem to see the ordinary citizen
today standing before the law like the laity in a medieval
church: at the far end the lights glow, the priestly figures
move to and fro, but it is in an unknown tongue that the
great mysteries of right and wrong are proc1aimed.l
He concluded by posing the question:
what willing allegiance can a man owe to a canon of
obligation which is not even conceived in such a form as to
be understood?

1. 'Some Reflections on Law and Lawyers', (1950) 10 Cambridge Law Journal, 348, 361.
Recent concern

95 Little has changed since Lord Radcliffe expressed his concerns. Sir
John Donaldson MR referred to precisely the same question in a case
in 1983. Merkur Island Shipping Corp v Laughton2 concerned the
question whether the International Transport Workers Federation (ITF)
had committed the tort of inducement to commit a breach of contract.
The answer depended on the effect of three interrelated Acts of
Parliament, none of them expressed in clear language and the most
recent of them adopting definitions which distorted their natural
meanings. Sir John Donaldson MR observed that:
The efficacy and maintenance of the rule of law, which is
the foundation of any parliamentary democracy, has at least
two prerequisites. First people must understand that it is in
their interests, as well as in that of the community as a
whole, that they should live their lives in accordance with
the rules and all the rules. Second they must know what
those rules are. Both are equally important, and it is the
second aspect of the rule of law which has caused me concern
in the present case, the ITF having disavowed any intention
to break the law.
In industrial relations, it is of vital importance that the worker
on the shop floor, the shop steward, the local union official,
the district officer and the equivalent levels in management
should know what is and what is not 'offside'. And they must
be able to find this out for themselves by reading plain and
simple words of guidance. The judges of this court are skilled
lawyers of very considerable experience, yet it has taken us
hours to ascertain what is and what is not offside, even with
the assistance of highly experienced counsel. This cannot
be right.3

Relationship to government policy

96 There is a growing awareness of the importance of proper

communication in relation to the rights and obligations of citizens. A
failure by the Parliament or the Government to communicate its message
as clearly as possible to its audience puts at particular risk those who are
not well educated, who have had relatively little experience, or who are
not fluent in the English language. Many of the Government's major
client groups, including those in receipt of social welfare payments are
within one or other of these categories. There is a special danger that
they will break the relevant rules, fall foul of the relevant procedures,
and be deprived of entitlements and opportunities if Government bodies
communicate with them in inappropriate ways. The objectives of the

2. [I9831 1 All ER 334.

3. At 351.
 Government's Social Justice Strategy include the extension of the
effective exercise of legal rights. That objective is put at risk by laws and
forms which are needlessly complex and pay little or no attention to the
principles of plain English. People must know their rights and be aware
of relevant opportunities if they are to exercise and make use of them.
Government initiatives to further the objectives of its Social Justice
Strategy will be less effective if resources have to be wasted on
unnecessary administrative tasks.

Response of legal system

97 United States. In the United States, the courts themselves are

responding to the problem in innovative ways. Perhaps the most
important decision is David v H e ~ k l eThis
. ~ involved a class action on
behalf of hundreds of thousands of elderly people in New York whose
Medicare claims had been reduced by the Department of Health and
Human Services and the insurance carrier administering the relevant
part of the Medicare program. Under the program, reduction of such a
claim was permitted if the particular treatment was not necessary, or
was not covered by the program, or if the doctor's charge was not
reasonable. A beneficiary was entitled to seek a review of a reduction of
a claim. After review, the insurance carrier was required to send a notice
notifying the beneficiary of the basis of the decision on review. Where
the amount involved was more than $100, there was an opportunity for
a hearing. The plaintiffs claimed that the review notices they received
were in violation of the due process clause of the United States
Constitution.
98 Chief Judge Weinstein of the United States District Court for New
York upheld their claim. The particular review letter received by Joseph
David was long and confusing. The explanation for the refusal of
additional payment was:
The Medicare Department has reviewed these claims and
have determined that no additional allowances are warranted.
They were paid correctly to the doctors' new and old profiles.
There was no indication of what the doctors' reasonable charge
allowance was. The phrase 'doctors new and old profiles' was not defined.
Expert evidence was given to the effect that the letter was understandable
only by someone with the reading ability of a college senior. While
other review letters were not as complex, the reading level required for
them was still above that of most of the relevant elderly population:
The review letters defy understanding by the general
populace. They are filled with confusing cross-references to
'control numbers' and are composed of paragraphs that seem
strung together randomly. Explanations are couched in
technical jargon. The words and phrases 'approved charges',

4. 591 F Supp 1033 (1984).

57
 'customary charges', 'prevailing charges', 'locality',
'economic index', and 'physicians' old and new profile',
which are the substance of the letter, are specialized Medicare
vocabulary. T o a layman unfamiliar with Medicare
regulations, this language has no real meaning.
Review letters are not only incomprehensible, but the
information they do contain is insufficient and misleading.
They set forth the figure which the carrier says is controlling
without making any pretense of showing how the carrier
arrived at the figure. The notices explain the computation
of the carrier's payment to the beneficiary only in generalized
terms, assuming the correctness of the reasonable charge.
This despite the fact that the key ingredients in the total
computation are the reasonable charge figure and the method
by which it is determined.5
Chief Judge Weinstein summed up the letter in the following way:
The language used is bureaucratic gobbledegook, jargon,
double talk, a form of officialese, federalese and insurancese,
and doublespeak. It does not qualify as English.
99 Australia. The doctrine of due process is available in the United States
as a catalyst for change in legal language. It has no counterpart in
Australia. Many American jurisdictions have gone further and enacted
specific and general laws prescribing levels of intelligibility in certain
documents. In Australia, however, legislative recognition of the
importance of proper communication of citizens' rights has been halting
and piecemeal. Specific information requirements are contained in a
small number of Acts. One example is the Insurance Contracts Act
1984 (Cth). This requires that the insured be 'clearly informed' of his
duty of disclosure and of a variety of terms in a proposed contract of
i n ~ u r a n c e Another
.~ example is the Credit Act 1984 (Vic). This also
requires that certain information be provided to consumers, partly on
prescribed forms which have been said to be a model of clarity.' But
many other areas of the law remain unaffected. The doctrine of
unconscionability might provide an answer in extreme cases. This
doctrine enables agreements which are fundamentally unfair to be set
aside in certain circumstances. Incomprehensibility of a contractual
clause is regarded as capable of giving rise to unconscionability under
the Uniform Commercial Code in the United state^.^ However,
Australian courts have not yet said anything on the matter, either under
the general law or under the Unfair Contracts Act 1980 (NSW). This
might not matter so much if laws and other legal documents were

7. W. Pengilley, submission, 29 December 1986.

8. See
Wille v Southwestern Bell Telephone Co, 219 Kan 755, 549 P 2d 903 (1976); J. Fort,
Understanding Unconscionability: Defining the Principle', (1978) 9 Loyola University Law
Journal 765.
 written clearly. But as earlier chapters of this report demonstrate, that
is not always the case.

Cost Savings
Costs of poor drafting

100 Laws which are not written in plain English impose unnecessary costs
on Government and on the community at large. A document that is not
readily comprehensible takes longer to understand, is more likely to
need a 'translator' and is more likely to be misunderstood. Poorly drafted
Bills consume the time of Members of Parliament who must understand
and debate them. They impede the conduct of business in Parliament
and interfere withthe Government's legislative program. Poorly drafted
Acts and regulations consume the time of those who must administer
or comply with them. They reduce the efficiency of administration and
of business activity contrary to the Government's policies on public
service efficiency and business deregulation. They waste the time of
lawyers and judges. The costs imposed by poorly drafted laws and
related documents could be much reduced if they were written in plain
English. The government would save administrative costs. The
community would benefit from a reduction in the costs of complying
with the law.

Savings on plain English forms

101 United Kingdom. Recent experience in the United Kingdom indicates

the potential savings which could result from adoption of a plain English
policy in relation to government forms. Since February 1982, there has
been a concentrated effort by Government departments in the United
Kingdom to reduce the number of forms used and to improve the
design of those that are essential. The Management and Personnel
Office of the Cabinet Office is responsible for the program. It reports
directly to the Prime Minister. By July 1985, 15,700 forms had been
eliminated and 21,300 had been significantly improved. Savings to
Departments by the redesign of forms amounted to millions of pounds
a year, of which 4 million pounds a year was identified in 1984-85
alone. The 1984-85 cost of work on forms was only 2 million pounds.
This included the cost of purchase of equipment.
102 One of the major factors in the savings has been the simplification of
language and layout to minimise errors in completing government
forms. A report made by Coopers & Lybrand Associates on the
effectiveness of forms used by the United Kingdom Department of
Health and Social Security9 identified the types of costs involved in the

9 . Operational Research Services :Forms Effectiveness Study, 1984.

59
 action necessary to correct errors on forms. These were of three main
types:
Costs to the Department. These included staff time for interviews,
telephone calls and visits; postage, telephone and stationery; travel
and subsistence.
Costs to respondents. These included the additional time spent on
interviews, telephone calls and visits; completing additional forms;
postage; and delay in receipt of benefits.
Costs to employers ofrespondents. These were constituted by the time
taken by staff in locating respondents to answer queries and the time
taken off work by respondents themselves.
103 The error rates on the forms were high and the costs enormous:
The DHSS currently uses some 12,000 different forms,
roughly half of which are issued to the public in numbers
varying from 10,000 to 30 million per year. Forms are used
for assessing entitlement to benefits, collecting information
and providing information to the public. Forms which are
badly designed generate misunderstanding and errors;
incorrect information may be given, questions may not be
answered or, in some cases, the entire form may be left
blank. In addition to the delay and frustration caused for
members of the public, employers and the DHSS, such
errors give rise to very significant cost. Estimates made during
the course of this assignment suggest that if the forms we
examined are typical then the costs of errors to the DHSS
in additional processing costs alone, average some 113,000
pounds per form per annum. Thus, for the 6,000 forms
issued to the public, the total annual cost to the DHSS of
errors could be of the order of 675 million pounds, with
costs and disbenefits of similar magnitude being incurred by
employers and members of the public.1°
104 A particular study was made of the costs resulting from errors in
completing 14 separate forms. One form alone, with an estimated annual
use in excess of 4 million copies, accounted for errors costing more
than 1 million pounds to remedy. The cost of the remedial action for
errors in all 14 forms was almost 11 million pounds. The estimate of
the cost imposed on respondents by the errors on those forms was almost
2 million pounds. Further costs imposed on respondents' employers
were more than 500,000 pounds.
105 Victoria. No equivalent studies have been made in Australia. However,
substantial savings have already been achieved in projects undertaken
during the Commission's work on the plain English reference. A project
on rewriting the traditional Summons and Information form will
eliminate both wasteful paperwork and unnecessary procedures. As a
result, 26 staff positions, including 15 in the police force, will be available
for redeployment to more useful areas. In a project on court forms in

10. At 1. See also Law Reform Commission of Canada, Annual Report, 1985-6,21.
 connection with road traffic offences, two forms have been eliminated
and the redesign of the third will reduce paperwork and save another 4
staff positions. The combined savings are estimated to be worth between
$400,000 and $600,000 a year.

Savings on plain English legislation

106 It is much more difficult to assess the likely savings to Government and
the community of the implementation of a plain English policy in
relation to legislation. There is no experience to rely on. There would
clearly be savings in administrative time and costs, particularly legal
costs, to the community. The level of these savings would depend on a
variety of factors. It is evident, however, that the savings in relation to
the time taken to comprehend legislation would be substantial. T o
investigate the improvement in the time taken to comprehend legislation
and the level of comprehensibility, the Commission engaged Dr Virginia
Holmes, Reader in Psychology at the University of Melbourne, to
conduct a study. The broad aim of the study was to determine whether
legislation drafted in the traditional manner is more difficult to
understand than legislation drafted in plain English. The study was
based on a comparison between traditional and plain English versions
of sections from the Companies (Acquisition of Shares) Act 1980 (Cth)
and the Futures Industry Act 1986 (Cth). Passages of original legislation
and plain English versions1' were given to separate groups of lawyers
and law students. They were asked to apply the legislation to a number
of hypothetical cases. The time taken to complete the task was recorded
and the answers were assessed. T h e results are set out in Table 1.

TABLE 1
Mean time to read test passage
Plain English Original
version version
Students
Futures
Companies
Mean

Lawyers
Futures
Companies
Mean

11, s150 Futures Industry Act 1986 (Cth) and s31 Companies (Acquisition of Shares) Act 1980
(Cth).
 There was no significant difference in the level of accuracy of the
answers given by participants.12 However, there was a significant
improvement in the time taken to reach that level. The mean time for
comprehending the plain English versions of the test passages was
between 112 and 113 the mean time for comprehending the traditional
versions. These findings strongly suggest that considerable savings could
be made for lawyers and the community if legislation were drafted in
plain English. A much more sophisticated study would be necessary to
establish the extent of those and other savings, including savings resulting
from a decreased need to seek lawyers' advice.

Other benefits

107 The Government would benefit from a plain English policy not only by
the obvious reduction of its costs in dealing with the public but also
through the increased understanding its officers would have of corporate
goals. Mr Brian Palfrey, a training and development consultant whose
work with various government departments and agencies has been
concerned with effective communication, said in his submission dated
23 February 1987:
In evaluating some of these programmes and from my
reading of the experiences of organisations that have adopted
(or imposed) a [plain English] house-style, I am impressed
by the results. One particularly interesting feature is that,
once the house-style is simplified, not only can the clients
understand, but the staff within the organisation suddenly
become more aware and productive. Plain English removes
the mystery and inaccessibility of documents not only for
the reader: the writer gets relief too, once the skills and
confidence begin to take root. One significant consequence
of this in some organisations has been that more staff become
capable of writing effectively and independently. This is
healthy. It makes more productive use of more people's
time; it raises self-esteem and enriches jobs; and, remarkably,
it allows staff to understand sometimes for the first time
exactly what the section or department does, and how it does
it.
More effective communication is therefore not just a benefit in external
relations. It assists an organisation in increasing its own efficiency in a
variety of ways. It leads to greater understanding of corporate goals,
greater job satisfaction and greater efficiency.

12. The passages chosen dealt with complex concepts. Even the plain English versions were difficult.
The rate of comprehension (words per minute) was slightly lower in the case of the plain English
versions than in the case of the traditional versions. This is probabley attributable to the absence
from the plain English versions of the repetitions in the original. These are familiar to lawyers and
law students.
6. IMPROVING THE CLARITY OF DRAFTING:
RECOMMENDATIONS

108 In the preceding chapters, the Commission identified a number of

defects in the language and the organisation of legislative material. It
suggested that these defects might be cured by the adoption of a plain
English policy. It examined a number of common objections to plain
English and concluded that they are based on misunderstandings about
the nature of plain English. It identified the benefits which would flow
from the adoption of a plain English policy. This chapter is concerned
with improving the clarity of drafting in legal documents, particularly
legislation. It suggests ways in which the existing defects might be
removed. It deals with the training of drafters, the organisation of
Government drafting services, the engagement in appropriate cases of
expert outside assistance, and the use of word processors and computers
in the drafting process.

Training of Drafters
A Drafting Manual

109 The implementation of the Government's plain English policy in

relation to legislation is already under way in the Office of Chief
Parliamentary Counsel. T o assist in the process, a drafting manual
concentrating on language problems and aimed at assisting drafters to
improve their drafting style and to avoid the defects noted in Chapter 2
of this Report has been prepared by the Commission. It forms Appendix
1 to this Report. Much of its content is equally applicable to other forms
of legal drafting.
The drafting manual should be formally adopted by the
Government as its ojj3cial guide to Departments and Agencies
in relation to the drafting of Acts, regulations and related forms
and explanatory documents. The drafting manual should be
supplemented by material prepared by Chief Parliamentary
Counsel dealing with the technical aspects of legislative drafting.
Formal training courses

110 Parliamentary counsel are recruited from the ranks of lawyers, usually
at a relatively early age.' Lawyers themselves are not generally trained
drafters. Although valuable drafting courses are available at both
Melbourne and Monash Law Schools these are optional and only a
small percentage of students enrol for them. There is no postgraduate
course in drafting, either for practising lawyers or for staff of the Office
of Chief Parliamentary Counsel.
111 The training of parliamentary counsel has traditionally been carried
out by the apprenticeship method, under which:
the newcomer works with and alongside a more experienced
officer and learns from him by watching the way he goes
about his work.2
Some people maintain that on-the-job training is the only way to learn
the art. This is reminiscent of the views held by some members of the
legal profession at the time of the establishment of legal practice courses3
as an alternative to articles of clerkship. One reason for the establishment
of those courses lay in the recognition of the inadequacies of the articled
clerk system to provide broad-based practical training at a uniform
standard for all students. It is now recognised that formal courses can
achieve a great deal in a relatively short time, even if on-the-job training
is also needed for the development of a fully-rounded lawyer. So it is
with the training of legislative drafters. In their case, too, on-the-job
training has not been entirely satisfactory. As a leading writer on drafting
observed some time ago:
T h e idiosyncrasies of masters were passed on to pupils. For
too long, the experience of the teacher has been the sole
criterion of what is correct. T h e tyro is bewildered by a mass
of formless constructions and the abuse of tautologies
potentially diverse. This is a sorry state of affairs, particularly
as analysis or disciplined compliance with the principles
underlying the drafting of legal documents can bring about
not only consistency but also an overall improvement in the
form of document^.^
112 Particularly during parliamentary sessions, a competent drafter is likely
to be under considerable pressure to meet drafting deadlines. Meeting
those deadlines must take precedence over other tasks, including the
training of apprentices. A formal course of training would not only be a
valuable contribution to improving the technical skills of parliamentary
counsel. It would also contribute to the clarity and intelligibility of

1 . A. Samuels, 'Improving the Quality of Legislation', (1974) 3 Anglo-American Law Review 523,
532.
2. J.Q. Ewens, 'Legislative Draftsmen: Their Recruitment and Training', (1983) 57 Australian
Law Journal, 567.
3. In Victoria, at the Leo Cussen Institute.
4. S. Robinson, 'Drafting-Its Substance & Teaching', (1973) 25 Journal ofLegal Education 514,
515.
 legislation. But a formal course should not entirely replace on-the-job
training. As a former First Parliamentary Counsel recently pointed out,
no amount of formal training can teach drafters such matters as 'how to
cope with the idiosyncrasies of their clients, of members of the legislature
or of minister^.'^
113 An earlier experiment. Formal courses of instruction for legislative
drafting were run between 1975 and 1981 by the Commonwealth's
Legislative Drafting Institute, headed by the late Mr Noel Sexton. The
Institute was established in 1974.'j Its functions were:
T o conduct courses of training and instruction in legislative drafting.
T o assist other countries (especially developing countries) in the
training of legislative drafters.
T o undertake research into methods and techniques of legislative
drafting with a view to the simplification of laws and procedures and
the reduction of costs.
T o foster interest in, and encourage suitably qualified persons to
enter, the profession of legislative drafting.
It was hoped that the Institute would provide training for people wishing
to become legislative drafters in Australia. The first course in 1975 was
limited to people nominated by the Commonwealth, the States and
Papua New Guinea. Only the Commonwealth, New South Wales,
Tasmania and Papua New Guinea nominated participants. In 1976,
invitations were sent to the Commonwealth, the States, Papua New
Guinea and other British Commonwealth countries in the South Pacific
area. Because only two nominations were received, the Institute's
program was suspended until the following year. In 1977, it became
clear that no nominations would be received from the Commonwealth
or the States. The course was eventually given to participants from a
number of developing countries. In subsequent years, invitations appear
to have been extended only to developing countries. The Institute was
abolished on 11 November 1981 as a result of recommendations made
by a Ministerial Committee to review Commonwealth functions (the
Razor Gang). The training of legislative drafters from developing
countries was to be left to on-the-job training in Canberra.'
114 Other models. A more ambitious and ultimately more successful
training program was established in Canada in 1970. Unlike the
Australian Institute, it is attached to a University. The Legislation
Training Programme is sponsored jointly by the University of Ottawa
and the Federal Department of Justice. The course was the brain-child
of Professor Elmer Driedger QC, former First Parliamentary Counsel
for Canada and the author of leading works on legislative drafting.8
Originally a post-graduate certificate program, it is now also a Master's

5. J.Q. Ewens, 'Legislative Draftsmen: Their Recruitment and Training', (1983) 57 Australian
Law Journal 569.
6. Legislative Drafting Institute Act 1974 (Cth).
7. Legislative Drafting Institute, Annual Reports, 1975-1981, AGPS, Canberra.
8. Composition of Legislation, 2nd ed, Department of Justice, Canada, 1976; A Manual of Instructwns
for Legislative Writing, Department of Justice, Canada, 1982.
 program leading to an LLM degree. The course lasts for 30 weeks and
consists of lectures, seminars and assignments. The assignments involve
redrafting of existing provisions and drafting original legislative
provisions. The redrafting assignments concentrate on improving
comprehensibility and removing obs~urity.~
115 Legislative drafting is also the subject of formal instruction in other
countries. In the United States, special mention should be made of the
course run at Indiana University by Professor Reed Dickerson, author
of a pioneering collection of materials on legal drafting in the American
Casebook Series.lo In the United Kingdom, Edinburgh University has
established an honours course on the subject of legislative drafting."
Formal training of legislative drafters to assist developing countries of
the Commonwealth is well under way. Initiatives in this direction were
taken by the Commonwealth Law Ministers at their meeting in London
in 1973. As a consequence, six-month courses have been regularly run
by the Commonwealth Secretariat in a number of countries. They have
been attended by more than 300 participants nominated by their
respective Governments. Drafting courses associated with universities
have now been established in the West Indies12 and Africa.13 In each
case, the degree of LLM is now available.14
116 A Legal Drafting Institute. The lack of a formal training course for
parliamentary counsel and for legal drafters in general seriously affects
their capacity to write plainly. They rely too much on poorly expressed
precedents and outmoded drafting conventions. After discussions with
the Attorney-General and with the Director-General of the Department
of Management and Budget, the Commission approached the Dean of
Monash Law School, Professor R. Baxt, to investigate the possibility of
establishing a Legal Drafting Institute at Monash University to be jointly
funded by the University and the Government. An application for
funding of a feasibility study has been made to the Victoria Law
Foundation. It is expected that the study will be conducted by the
Public Service Board. The study will include:
Assessing the degree of interest and support for such an Institute
from government, commercial and professional bodies both within
Australia and more generally in South East Asia and the South Pacific
region.
Investigating the possible product range of such an Institute in
legislative and non-legislative drafting, for example, commercial and
public documents.

9. E.Driedger, 'The Legislative Training Programme in Ottawa', (1973) 54 The Parliamentarian

228.
10. Materials on LegalDrafting, Wests Publishing Co, 1981.
11. H.Henderson and T. Bates, 'Teaching Legislation in Edinburgh: An Outline', [1980] Statute
Law Review, 15 1.
12. Barbados, 1979.
13. Zimbabwe, 1985.
14. K. Makamure, 'The Diploma in Legislative Drafting at the University of Zimbabwe: An
Experience from the New Commonwealth', [I9851 Statute Law Review 21.
 a Assessing the likely on-going demand for the services of such an
Institute from government, commercial and professional bodies within
Australia in South East Asia and in the South Pacific region. This
will include an assessment of the likely competition from other similar
institutes and training programs and the appropriate role of a new
Institute in the future delivery of such services.
a Estimating the likely establishment and annual operating costs of the
Institute and assessing its financial viability given the likely market
demands for its services.
a Estimating the level at which private and State and Commonwealth
Government funding could be warranted.
a Researching the secondary effects of improved drafting in both
legislative and non-legislative areas and investigating methods for
assessing their financial implications.
Unlike its Canadian model, the Institute would cover not only legislative
drafting, but also other forms of legal drafting. It would have both
teaching and research functions. T h e projected teaching functions of
the Institute include those at the postgraduate level. The possibility of
certificate and diploma courses, as well as degree courses, is to be
investigated. The projected research functions of the Institute include:
a) the principles and techniques of drafting;
b) techniquesofeva1uationofthestandardofdrafting;and
c) the administration and delivery of drafting services,
the organisation of drafting units and the
qualifications and training of personnel.
Its management structure and the precise basis of its on-going funding
are matters for discussion after successful completion of the feasibility
study.
The Government should support the establishment of a Legal
Drafting Institute at Monash University as a joint project
between the University and the Government. When the Institute
is established, qualifications obtained from it should become,
except at base grade and in the absence of exceptional
circumstances, a mandatory requirement for appointment to,
or promotion within, the Office of Chief Parliamentary Counsel.

Broadening the experience of parliamentary counsel

118 The development of skills in relation to clear communication requires

more than a manual or a formal course, important though these are. It
also requires a keen appreciation of the needs and abilities of the
audience of relevant documents. Lawyers in private practice deal
regularly with the business community and the general public. They
are more likely than parliamentary counsel to understand the needs and
abilities of the business community and the general public in relation
to legislation. Policy officers in Departments and Agencies also have
regular contact with client groups, as well as with senior administrators
 and politicians. They are more likely than parliamentary counsel to
appreciate the particular administrative and social goals which specific
proposals are intended to serve. Few recruits to the Office of Chief
Parliamentary Counsel come from within the public service. Many of
them enter the Office shortly after completion of their degrees or after
only a very brief period in private practice. Chart 1 indicates the extent
of experience in private practice of recruits to the Office in the past 5
years. Of 27 recruits, 9 had no private professional experience at all.
Seven others had less than 1 year's experience. Only 4 of the 27 had
had more than 5 years in private practice.

CHART 1

PARLIAMENTARY COUNSEL RECRUITS

Experience in Private Practice
10

119 On entry to the Office, recruits have as their clients only Ministers and
Government Departments. They deal with instructing officers who are
either government lawyers specialising in policy development or career
bureaucrats. They have little if any professional contact with ordinary
citizens or interest groups or lawyers in the private profession. As an
English commentator has said: 'At present, the Parliamentary draftsman
gets further and further removed from the day to day application and
use of statutes in legal practice.'15 There is a grave danger of
organisational isolation. There is a clear need to bring legislative drafters
into closer contact with their audiences.

15. A. Samuels, 'Improving the Quality of Legislation', (1974) 3 Anglo-American Law Review 523,
532.

68
 The Secretary to the Attorney-General's Department should
investigate ways of diversifying the experience of parliamentary
counsel. The options which should be investigated include
exchange schemes with, and secondments to, private solicitors'
offices and policy Units in Government Departments and
Agencies.

Electronic aids to drafting

120 Better training and greater experience should lead to increased clarity
in legislative drafting. But these are not the only ways in which drafting
might be improved. Word processors and computers have already
transformed the process of technical writing through their remarkable
capacity for editing and revising documents. Drafters can identify all
uses of a word to help them check consistency in usage. Some systems
can also generate a list of all words used in a document in order to assist
in the preparation of indexes. They could also be used to assist in
generating and retaining standard forms and variations on standard
forms to assist in achieving consistency across the statute book.
121 Other relevant capacities of word processors and computers are less well
known. A recent review16 discussed software systems which can check
and even correct spelling, abbreviations and common capitalisations.
They can also note excessive sentence length, the relative frequency of
word use and the 'tonal' features of a passage (for example, the extent
to which formal language is used, and the use of hackneyed words and
phrases). More sophisticated aids to drafters are being developed. It is
hoped to produce programs which identify common misuses of particular
words (for example 'infer' in place of 'imply') and the use of particular
words in different senses in the same context. Plans are being drawn up
to write programs to identify ungrammatical sentences, particularly
those involving failure of agreement in number, person, gender and
case.
122 Systems which provide some of these functions are already commercially
available. Major developmental work is taking place in a number of
quarters, notably in IBM's 'Epistle Project' at the Yorktown IBM Watson
Research Center. Means of assisting drafters of legal documents has
been the subject of a special study.'' These developments are of profound
significance for future legal drafting.
Chief Parliamentary Counsel should investigate existing
software programs and closely monitor developments to ensure
that appropriate use is made of electronic aids to drafting. A
software program should be developed in cooperation with other

16. L. Miller, 'Computers for Composition: A Stage Model Approach to Helping', (1986) 20 Visible
Language 188.
17. D. Halpern and L. Miller,Automated Legal Writing, 1984.
 Chief Parliamentary Counsel elsewhere in Australia to facilitate
clear and consistent drafting.

Organisation of drafting services

123 The recommendations in the preceding section of this chapter should

go a considerable way towards implementing the government's plain
English policy, particularly in relation to legislation. However, the
Commission's examination of the way in which legislation is drafted
has led it to the conclusion that implementation of that policy would be
enhanced if a number of other steps were to be taken. These include
clarification of the role of legislative drafters, clarification of the duties
of instructing officers, re-organisation of responsibility for subordinate
legislation, and the use of expert private professional services to draft
legislation in appropriate cases.

Clarajication of the role of legislative drajiers

124 Clear drafting can only proceed on the basis of clear instructions about
the policy to be implemented. Not all drafting instructions are as clear
and well thought out as they might be. That is sometimes the fault of
instructing officers but it may also be attributable to a lack of a clear
definition of the respective roles of parliamentary counsel and instructing
officers. The traditional view of the division of functions between
parliamentary counsel and Departmental instructing officers is clearly
expressed in the following statement:
The Office of Parliamentary Counsel is not really geared to
provide this kind of assistance; nor indeed is any similar
drafting office. T h e traditional role of Parliamentary
Counsel, and indeed the only role for which they are trained,
is to incorporate formulated proposals into a legislative
framework. It is not, and has never been, their role to render
substantial assistance in the construction of a viable policy
scheme. The Parliamentary Counsel are supposed to be
experts in drafting, not experts in the formulation of policy
proposals. When they are called upon to draft a Government
Bill, the policy and scheme to which legislative form is to be
given have been worked out in considerable detail by persons
in the instructing Department who have the necessary
expertise in the relevant area. If Parliamentary Counsel are
to perform for a private member the role for which they are
trained, namely, the incorporation into a legislative
framework of a scheme that has been worked out, it will be
 necessary for the member to have a fully-developed scheme
in readiness ... l8
125 The Commonwealth's Legislation Handbook19 reflects a similar
approach. It provides for the preparation of dra'fting instructions in two
stages. Preliminary instructions are prepared for attachment to the
Cabinet submission. These are normally circulated beforehand to other
Departments for any comment which may need to be included in the
submission. Final instructions are prepared after Cabinet has approved
the submission in whole or in part. They are lodged with the Office of
Parliamentary Counsel within five days after the instructing Department
has been notified of the Cabinet decision. Parliamentary counsel
themselves appear to play little role in the development of the
instructions. T h e Legislation Handbook specifically states that
'Preliminary drafting instructions need not normally be sent to the
Office of Parliamentary C o ~ n s e l ' . ~ ~
126 The Legislation Handbook deals in some detail with the respective
functions of parliamentary counsel and of instructing officers. Instructing
officers are required to provide instructions covering:
(a) the objectives of the proposed legislation and, in
detail, the means (the administrative structure) by
which it is suggested they be achieved;
(b) difficulties of a legal, administrative or other nature
that appear to be involved;
(c) reference to other similar existing legislation which
may be affected or require modification; and
(d) any other details necessary for the preparation of a
draft bill by Counsel.21
The extent of the detail required in instructions can be gauged by
referring to the section of the Legislation Handbook which deals with
specific matters which may need consideration. It contains almost seven
pages dealing with the specific matters which may need consideration
by instructing officers. These include a number of matters on which
expert legal knowledge is essential. In several cases, such as the effect
of the proposed legislation on State legislation, instructing officers are
advised to seek guidance from the Attorney-General's Department. But
the instructions which officers are required to present must incorporate
both the main principles of the legislative scheme and all relevant
matters of detail.22
127 The role of the Office of Parliamentary Counsel is to draft legislation
on the basis of the instructions it receives. However, the Handbook
recognises that:

18. G.K. Kolts, (then First Parliamentary Counsel of the Commonwealth), 'The Provision of
Drafting Services for Private Members of the Federal Parliament' in K. Turner (ed), The
Information Sources of Parliament, 97-8.
19. Legislation Handbook, AGPS, Canberra, 1983.
20. At paragraph 4.6.
21. At paragraph 4.17
22. At paragraph 4.18.
 the dividing line between policy and drafting ... is not always
clear and Counsel may often be involved in the resolution
of policy issues. Counsel considers how a proposed policy
may best be implemented and is often required to round out
the policy and fill in the details.23
Moreover, the legislative plan:
may be in a different form from that envisaged in the proposal
approved by Cabinet or set out in the drafting instructions.
The legislative plan is usually discussed with officers of the
instructing department and modified until agreement is
reached.24
Even so, the distinction between the roles of instructing officers and
parliamentary counsel is generally clear. Instructing officers must
formulate instructions in considerable detail, generally without assistance
from the Office of Parliamentary C o u n ~ e l The. ~ ~ Attorney-General's
Department fills the void when expert assistance on legal policy is
required by the instructing officers.
128 Victoria. The Commonwealth approach has been adopted in slightly
modified form in Victoria. Drafting is only to commence when a Cabinet
submission for a Bill in Principle has been approved by Cabinet. Drafting
instructions must be attached to the Cabinet submission. These are to
be prepared by instructing officers rather than parliamentary counsel.
They must set out in detail the proposed legislative scheme. Early
editions of the Legislation Handbook appeared to assume that
parliamentary counsel would only become aware of the instructions
after they had been approved by Cabinet along with the Bill in Principle.
However, a change in emphasis was made in the 1985 Cabinet
Handbook:
An instructor should usually have discussions with
Parliamentary Counsel prior to completing the drafting
instructions. Parliamentary Counsel should also consider
drafting instructions on complex legislative proposals.
However, time spent by Parliamentary Counsel on such
discussions should not be excessive. Also officers should not
use Parliamentary Counsel to avoid their responsibility in
presenting a coherent, adequate and comprehensive drafting
proposal.26
Parliamentary counsel have in fact collaborated at an early stage with
policy officers in relation to a number of recent sensitive and major
projects, including those dealing with accident compensation and
transport accidents.
129 A radical approach. A much more active role for parliamentary counsel

23. At paragraph 5.4.

24. At paragraph 5.5.
25. The Legislation Handbook itself states that 'preliminarydrafting instructions need not normally
be sent to the Office of Parliamentary Counsel': paragraph 4.6.
26. At paragraph 152.
 in relation to policy was put to the Commission by the Chief
Parliamentary Counsel for South Australia, Mr G. Hackett-Jones, QC:
the important point is not that it is untrue but that it really
oughtn't to be true. After all, a parliamentary counsel ought
to be a person with a wide knowledge of the law and of
statute law in particdar. He or she knows how a vast range
of legal problems ha-ve been dealt with in the past and, on
the basis of that knowledge and a certain amount of innate
ingenuity, should be able to suggest possible ways of
approaching any problem that is likely to be thrown up. A
parliamentary counsel is-at least according to my
perception-a legal theoretician who plays a central role in
the shaping of legislative policy. This is not to say that the
parliamentary counsel imposes policies on the client. He or
she is in this respect like an architect who works within the
client's reasonable specifications and will not design a
mansion for clients who have asked for plans of a home unit.
But, like the architect, the parliamentary counsel should be
responsible for designing the juristic and linguistic structures
of statute law and for ensuring that the structures are sound.
The traditional view of the parliamentary counsel's function
grossly demeans that function. A parliamentary counsel is,
according to that view, rather like a medical practitioner
who insists on his patients diagnosing their own illnesses
and prescribing their own remedies while he merely sits at
his desk translating the prescriptions into appropriate
language for the pharmacist.27
130 According to Mr Hackett-Jones, the result of adopting the traditional
approach is that drafting instructions are elaborated in more detail than
is necessary or desirable. As a result, the instructions dictate not only
the policy but also the juristic and linguistic structures of the Bill. The
drafter loses control of the structure to the client. In functional terms,
the logic of the traditional approach is pursued in the following manner:
When the first draft of a Bill has been prepared, it is often
apparent that, despite the instructors' best endeavours to
cover every eventuality, important gaps remain. T h e
draftsman does not consider it appropriate to use his own
experience and imagination to fill these, so the instructors
are assembled and a process known as 'drafting in committee'
takes place. In this process, the draftsman acts as a kind of
midwife and tries to squeeze instructions from constipated
bureaucratic minds. The draftsman stands ready to catch
them as they emerge and often amends the draft on the spot.
When this process is completed, the draft is sent out for
comment. Someone may point out that the incipient
legislative creature has no arms. Arms are taped on. Someone
may point out that it has no head. A head is improvised and

27. Submission, 3 December 1986, 12.

73
 stitched on. No-one dares to mention the unmentionable
truth: that it would be better to cut its throat and secrete it
in the nearest drain. The draft ends up resembling an
accident victim-covered in linguistic bandages from head
to foot. It is, by now, riddled with cross-references-these
are often primary indicators of a basic structural malaise.28
131 None of this suggests that parliamentary counsel should assume the
role of policy officers. The development of policy is a matter for Ministers
and their Departments. But the development of complex policies which
are to be translated into legal form requires the early involvement of
those who must make the translation. Ministers are entitled to early
advice from experts on whether their policies can be put into a legal
form which is consistent with the Government's legal policies. There is
a growing awareness of this fact in Victoria. Although parliamentary
counsel should not take over the role of policy officers, neither should
they be divorced from the development of policy. They are in a far
better position than policy officers to work out the details of a legislative
scheme. They are experts in the alternative methods by which a
formulated policy may be put into legislative form, and the amount of
detail which must be put into legislation if the policy is to be made
effective. Often enough, policy officers are forced to amend aspects of
their policy because it is not practicable to implement them in legislative
form. Insights such as these are the province of parliamentary counsel
almost alone; they are not normally enjoyed by the general run of policy
officers, many of whom have no legal training.
132 Early involvement of parliamentary counsel in a major policy
development would contribute to the clarity of the legislation designed
to implement it and would also reduce the risk of inconsistency in the
statute book. There are, or should be, general themes running through
all legislation. The statute book should be as coherent as possible in
matters of legal principle. These include such disparate matters as
government structures, the division between judicial and administrative
powers, the liberty of the subject, the presumption of innocence, and
controls over administrative decisions.
Appropriate amendments should be made to the Cabinet
Handbook to give positive encouragement to instructing oficers
and parliamentary counsel to consult with one another during
the development of detailed policy proposals in respect of major
new legislation and major rewriting of existing legislation. These
consultations should not be restricted to the period immediately
before the making of the Cabinet submission for a Bill in
principle. A Cabinet submission should not go forward for
consideration by the normal procedures unless parliamentary
counsel have indicated that the drafting instructions are
appropriate and adequate. Where consideration of the Bill in
Principle cannot await the production of revised instructions,
 the defects noted by parliamentary counsel should be attached
to the Cabinet submission when it goes forward for consideration.

Duties of instructing oficers

133 A lack of early consultation with parliamentary counsel in relation to

major policy developments is only one factor contributing to inadequacy
in drafting instructions. Another is a lack of clarity concerning the
duties of policy officers with respect to the preparation of instructions
for Parliamentary Counsel.29Suggestions have been made that Chief
Parliamentary Counsel should arrange seminars on the subject with
policy officers and should develop a set of guidelines, or a check-list, to
assist policy officers in understanding the matters and the level of detail
required to be covered in drafting instructions. Detailed sets of questions
could be developed to guide instructing officers in relation to the detail
that is needed by parliamentary counsel. On the subject of powers of
entry, search and seizure, for example, the questions might include the
following:
a ) Are powers of entry, search and seizure necessary?
b) Who is to exercise the power?
c) Is a warrant or other authority required?
4 What limitations as to time or prior notice should be
included?
e) Is provision required for an obstruction offence?
f ) Is a power to stop and search a person or vehicle
necessary?
g) Is a power to take samples for analysis or a power to
seize records necessary?
h ) Is a power to take names and addresses necessary?
i ) Should there be provision for compensation; if so, in
what circumstances?
Chief Parliamentary Counsel should take urgent steps to develop
guidelines and sets of questions to assist instructing officers in
drawing up drafting instructions, and to arrange periodical
seminars involving parliamentary counsel and instructing
oficers to increase understanding on all relevant matters.

Improving regulations

134 Split responsibilities. Acts and regulations form part of a single and
coherent legislative message. Ideally, the persons involved in drafting
an Act should also be involved in drafting the regulations. That is likely

29. This problem may be compounded by the practice adopted in some Departments and Agencies
of requiring a legislation officer rather than the responsible policy officer to prepare the
instructions: meeting with policy advisers, 25 May 1987.
 to produce a clear and consistent message. It is also likely to be the most
efficient use of resources. In Victoria, however, while parliamentary
counsel are responsible for drafting Bills, subordinate legislation officers
of Departments and Agencies have the prime responsibility for drafting
regulations. A similar division of responsibility exists nowhere else in
Australia, apart from Tasmania. In New South Wales, South Australia,
Western Australia and the Northern Territory, parliamentary counsel
draft regulations. In the Commonwealth, the Australian Capital
Territory and Queensland, the Office of Parliamentary Counsel does
not draft regulations, but neither do Departments and Agencies. The
task is performed centrally, by the Commercial and Drafting Division
of the Attorney-General's Department in the case of the Commonwealth
and the Australian Capital Territory; and in the Solicitor-General's
Office in the case of Queensland.
135 Role of Chief Parliamentary Counsel. Although subordinate legislation
officers are primarily responsible for drafting regulations, the Office of
Chief Parliamentary Counsel plays an important role in the process.
For some time, it has had the responsibility of settling the regulations
drafted by subordinate legislation officers. Since 1986, it has taken sole
responsibility for drafting regulations under Acts administered by the
Attorney-General. Moreover, since 1984, it has had statutory functions
with respect to regulations by virtue of the Subordinate Legislation Act
1962 (Vic). Under subsection 13 (3), a proposed regulation must be
submitted to Chief Parliamentary Counsel for advice on a number of
questions including whether it 'is expressed as clearly and
unambiguously as is reasonably possible'.
136 Reasons for concern. There are two main reasons for concern about the
present division of drafting duties between Chief Parliamentary Counsel
and subordinate legislation officers. The first is one of efficiency. Except
in relation to the Attorney-General's areas of responsibility, there is a
double handling of regulations, first by Departments or Agencies and
then by parliamentary counsel. This inevitably wastes resources. It may
put parliamentary counsel in the difficult position of making judgments
on matters without adequate background knowledge. Moreover, while
Chief Parliamentary Counsel is required to advise whether regulations
are expressed as clearly and unambiguously as is reasonably possible,
Chief Parliamentary Counsel has no formal say in whether a particular
regulation should be made despite its perceived defects. While the
Subordinate Legislation (Review and Revocation) Act 1984 (Vic)
requires Chief Parliamentary Counsel's advice to be given to the
Governor-in-Council, it might be better if Chief Parliamentary Counsel's
approval were normally required before subordinate legislation is
proposed.
137 The second reason for concern is that, as Chart 2 demonstrates, by no
means all subordinate legislation officers in Departments and Agencies
are lawyers. Drafting is for many of them a part-time job. There is no
coordinated system of training. Subordinate legislation officers cannot
be expected to acquire the level of technical skill required for marrying
precision and clarity in legislative drafting. Inevitably, some regulations
are less well drafted than they might be. Poorly drafted regulations, like
poorly drafted Acts, impose large and unnecessary costs on the
 community. In some cases, the regulations are the most important part
of a legislative scheme. They should be as well drafted as the Acts under
which they are made.

CHART 2

SUBORDINATE LEGISLATION OFRCERS

Required Qualifications by Agency

Agencies Using
Lawyers (44.4%)

Agencies Using
non-lawyers(55.6%)

138 Achieving quality control. Adequate quality control of regulations is

not likely to be achieved indirectly by the vetting of regulations under
section 13 of the Subordinate Legislation (Review and Revocation) Act
1984 (Vic). It is only likely to be achieved if the function is directly
managed. Clear lines of accountability should be created between those
who perform the task and those who are responsible for quality control.
There are several ways in which that might be done:
The function and resources could remain decentralised, but Chief
Parliamentary Counsel could be given specific responsibility, perhaps
in conjunction with the Public Service Board, for the training and
development of officers and for the maintenance of standards across
the system.
The function and resources could be located centrally in the Office
of Chief Parliamentary Counsel, but officers could be seconded out
in appropriate cases to maintain the desired level of client services.
The function and resources could be located centrally in the Office
of Chief Parliamentary Counsel, but the function could be organised
 along client services lines, with specific expertise being developed for
particular program areas.
The function and the resources to perform it could be located centrally
in the Office of Chief Parliamentary Counsel and the resources
organised on the same basis as for primary legislation.
139 It is unlikely that adequate quality control could be achieved by Chief
Parliamentary Counsel if the function of drafting subordinate legislation
and the resources necessary for that function were to remain
decentralised. Split accountability of the relevant officers is likely to
lead to confusion about responsibilities, uncertainty of priorities and
ineffectiveness in management. The main benefit of decentralisation is
said to lie in the immediate responsiveness of subordinate legislation
officers to the relevant program managersa30Subordinate legislation is
said to be inseparable from management of programs: an understanding
of the problems facing management is essential if the drafting of
subordinate legislation is to correspond with the needs of program
managers. The Commission does not doubt the need for drafters to
understand the nature of the problems which legislation is intended to
resolve. But the point applies equally to drafters of primary legislation
as to drafters of subordinate legislation. Indeed, the'need is greater in
the former case than in the latter, since primary legislation establishes
the framework within which regulation and management must take
place. Once enacted, it is much more difficult to alter than subordinate
legislation. Despite this, no-one suggests that the function of drafting
primary legislation should be decentralised.

Urgent consideration should be given to the possibility of

transferring to Chief Parliamentary Counsel responsibility for
the drafting of all regulations. The necessary reorganisation
should take account of the need not to interfere with the
obligation of Departments and Agencies, under section 5 of the
Subordinate Legislation (Review and Revocation) Act 1984
(Vic), to update and re-enact 1962-1972 regulations by 30
June 1988. If it is decided not to transfer drafting responsibility
to Chief Parliamentary Counsel, consideration should be given
to other organisational options to ensure proper training of
subordinate legislation ojicers and the system-wide monitoring
of standards by Chief Parliamentary Counsel.

The first of these recommendations would require the transfer to the

Attorney-General's Department of funds representing the present cost
to each Department of drafting its own regulations. A reduction in the
total cost of drafting regulations would more than compensate for the
costs associated with implementation of the proposal.

30. Meeting with subordinate legislation officers, 23 April 1987.

Drafting assistance from private practitioners

140 The greater the understanding of the subject matter possessed by a

drafter, the better the chances of a clearly intelligible draft. The Office
of Parliamentary Counsel may not always contain experts in the field to
which the Act refers. Expertise may be restricted to the private legal
profession or the universities. The possibility of engaging members of
the private profession for appropriate drafting tasks has been raised
from time to time. Not surprisingly, there has been some resistance to
the suggestions.
141 A Management Review of Chief Parliamentary Counsel's Office in
1986 recorded some of the reasons behind this r e ~ i s t a n c e .They
~~
included:
The need to preserve confidentiality in relation to government
business.
The ignorance of the private profession in relation to the machinery
of government and related legislative measures.
The inability of the private profession to meet tight deadlines and to
be available at short notice during the passage of legislation through
Parliament.
On this basis, and on the ground of high cost and lack of accountability
and control, the Review Team rejected the suggestions that legislative
drafting be contracted out.
142 The need for confidentiality must be recognised, but should not be
exaggerated. Details of proposed legislation are often announced in
advance by Ministers and consultation often takes place with interested
groups and individuals in connection with the development of policy
and its translation into Bill form. The Credit Act 1984 (Vic) and the
legislation which comes from the Ministerial Council on Companies
and Securities Law are outstanding examples. In other cases, where
confidentiality is regarded as important, there is no reason to believe
that members of the private profession are more likely to break
confidences than members of the public service. Confidentiality is, after
all, fundamental to the lawyer-client relationship. There may be some
reason for concern that a member of the profession who is engaged to
do drafting work may subsequently make use for another client of
'inside' information which is obtained. This might be against the interests
of the relevant Government department. But that risk could easily be
met by appropriate contractual terms between the Government and the
relevant member of the private profession.
143 It is true that members of the private profession are subject to a wider
variety of demands on their time than members of the Office of
Parliamentary Counsel. Many of them may also lack the specialist
knowledge of government processes possessed by members of the Office.
That may preclude handing over total responsibility for particular Bills
to members of the private profession. But it is no objection to involving

31. Information supplied by Attorney-General's Department.

79
 the profession in the drafting of legislation under the ultimate authority
and control of Chief Parliamentary Counsel. Management of the general
drafting program itself demands that the Office coordinate all relevant
work. T h e need to maintain legal consistency and the highest level of
intelligibility across the statute book as a whole also demands centralised
control. However, none of these factors requires that the Office and the
Government be deprived of the benefits which would flow from
involvement of members of the private profession in legislative drafting
in appropriate cases. Their expertise and their insights, particularly in
relation to the practical operation of legal rules, would be invaluable.
They would also bring a fresh approach to language. They could be
engaged, in appropriate cases, to prepare drafts of legislation themselves
and to comment on, and correct, drafts prepared within the Office.
144 Lying behind some of the objections to the engagement of members of
the private profession for legislative drafting is the view that drafting is
a job for an expert in drafting rather than an expert in the subject matter
of the draft. A Member of the United Kingdom Parliament once
colourfully referred to this view as the 'fanatical belief that writing law
is a monopolistic mystery of the Parliamentary draftsman's impenetrable
monastery.'32 While the belief may not be fanatical, it is certainly in
error. Leaving technical aspects to one side, drafting legislation is, in
principle, little different from drafting private legal documents.
145 Before the establishment of centralised parliamentary counsel offices33
most legislative drafting was done by members of the private profession.
In most cases they were conveyancers, not expert in the areas in which
they were drafting. Their efforts were far from outstanding. Drafting
has improved substantially since the creation of centralised legislative
drafting offices. The structure of legislation and its language have been
improved. Greater consistency has been achieved across the statute
book. Even so, some of the best examples of legislative drafting are to
be found in statutes drafted by people other than parliamentary counsel,
notable cases being the Sale of Goods Act 1893 (U.K.), the Bills of
Exchange Act 1882 (U.K.)34 (both drafted by C h a l m e r ~ ) ,and ~ ~ the
Queensland Criminal Code 1901 (drafted by Sir Samuel Griffith, Chief
Justice of the Supreme Court of Queensland, later Chief Justice of the
High C o ~ r t )There
. ~ ~ are many improvements which still need to be
made in legislative drafting. A monopoly in the Office of Chief
Parliamentary Counsel may be unhealthy and undesirable. As an English
commentator has said, 'competition, in a co-operative sense, should

32. A. Samuels, 'Improving the Quality of Legislation', (1974) 3 Anglo-American Law Review 523,
532.
33. Britain in 1869; New South Wales in 1878; Victoria in 1879. See R. Parsons, Lawyers in the
New South Wales Parliament, 1870-1890 :a study of the legislative role of private members (PhD
thesis, Macquarie University) 1972, 27%.
34. The Bills of Exchange Act 1882 was described by Mackinnon LJ as 'the best drafted Act of
Parliament which was ever passed'. Bank Polski v Mulder [I9421 1 All ER 396, 398.
35. Subsequently appointed to the Office of Parliamentary Counsel and made First Parliamentary
Counsel in 1902.
36. See A. Castles, An Australian Legal History, Law Book Co, Sydney, 1982,487.
 broaden the experience and expertise available to the drafting office'.37
It should also ultimately lead to improvement in the intelligibility of
legislation.
In appropriate cases members of the private profession should
be retained to assist the Ofice in drafting legislation. Chief
Parliamentary Counsel should retain ultimate authority and
responsibility for the legislation. Members of the private
profession should be retained only with the knowledge and
approval of the Minister responsible for the legislation in
question. The risk of the subsequent use of 'inside' information
should be dealt with by contractual arrangements between the
Ofice of Parliamentary Counsel and the private practitioner.

Private legal documents

146 Implementation of the Government's plain English policy in relation

to private legal documents is more difficult. The control that exists in
relation to legislative and Government documents is lacking. One
possibility is the passing of a plain English law requiring that all legal
documents or certain types of documents, achieve an appropriate level
of intelligibility. This might be modelled on the Federal and State plain
English laws in the United States.38 The Federal laws apply only to a
narrow field of consumer documents. The scope of the State laws is also
limited by reference to types of document or a monetary maximum or
both. The types of document covered include credit purchase, money
lending, leasing and insurance contracts. The monetary limits range
from $25,000 to $200,000.39 Of the seven American States which had
general plain English legislation by 1984, three imposed legibility
requirements, dealing with such matters as type size, spacing and
contrast. All seven States imposed language requirements as well. In
New York the relevant documents had to be written in 'a clear and
coherent manner using words with common and everyday meanings'.40
Only one State imposed an objective test as well, requiring an average
word length of less than 1.55 syllables, an average sentence length of
fewer than 22 words, an average paragraph length of fewer than 75
words, no sentence in excess of 50 words and no paragraph in excess of

37. A. Samuels, 'Improving the Quality of Legislation', (1974) 3 Anglo-American Law Review 523,
532.
38. For details, see H. Lloyd, 'Plain English Statutes: Plain Good Sense or Plain Nonsense?' [1986],
Law Library Journal, 683,686-688.
39. J. Wetter, 'Plain Language in Pennsylvania : Fading Issue or Development on the Horizon?',
(1985) 89 Dickinson Law Review 441,444-445. See also B. Leete, 'Plain English Legislation: A
Comparison of Approaches', (1981) 18 American Business Law Journal 511; R. Moukad, 'New
York's Plain English Law', (1980) 8 Fordham Urban Law Journal 451'; A. Millus, 'Plain
Language Laws: Are They Working?' (1983) 16 Uniform Commercial Code Law Journal 147; B.
Bowen, T. Duffy & E. Steinberg, 'Analysing the Various Approaches of Plain Language Laws',
(1986) CommunicationsDesign Center, Carnegie Mellon University, Pennsylvania.
40. New York General Obligation Law $5-702.
 150 words.41 However, State legislation dealing solely with insurance
contracts commonly uses objective standards based mainly on the Flesch
Test.42 Remedies for breach of the United States plain English laws
include damages awards with relatively low ceilings and the recovery of
lawyers' fees. In most States, class actions may be brought. Injunctive
relief is also a~ailable.~3
147 There is no legislation in Australia comparable with Northern American
plain English laws. However, minimum legibility and intelligibility
standards are set in some Commonwealth and Victorian statutes. The
most extensive treatment of the subject is in the Credit Act 1984 (Vic).
That Act is limited to a range of consumer contracts. It forbids the issue
of documents that are 'not readily legible'. The Credit Licensing
Authority may direct that a document not be used if in the opinion of
the Credit Tribunal, it is:
(a) expressed in language that is not readily
comprehensible;
(b) written or printed in a colour, or on paper of a colour,
that detracts from the legibility of the document; or
(c) written or printed on a page in a style or manner that
detracts from the legibility of the document ...44
Documents may also be submitted to the Credit Licensing Authority
for clearance by reference to these ~ t a n d a r d sThe
. ~ ~ Insurance Contracts
Act 1984 (Cth) deals with the problem differently. It is not restricted to
consumer contracts. It contains a number of provisions which simply
require that an insured be 'clearly informed' of certain matters which
are relevant to a decision whether or not to enter into a particular
contract of insurance.46
148 In a recent assessment of North American plain English legislation,
Professor Reed Dickerson concluded that they had performed a valuable
function.47 A survey of banks, credit unions, finance companies, real
estate firms and other groups affected by the plain English law in New
York revealed that 75% of the 200 or more businesses surveyed were
complying with the law. Most firms acknowledged that they would not
have revised their forms if it had not been for the plain English law.48

41. J. Wetter, 'Plain Language in Pennsylvania: Fading Issue or Development on the Horizon?',
(1985) 69 Dickinson Law Review 441,448.
42. R. Flesch, The Art of Readable Writing, 25th Anniversary Edn, Harper & Row, New York, 1974,
247f. The Flesch test and other 'objective' tests are useful in detecting incomprehensibility of
language. However, they are mechanical in nature. The Flesch test, for example, relies on
average syllables and words per sentence; it takes no account of word familiarity, let alone
grammar, syntax and structure. There is, therefore, considerable doubt whether such tests are
useful as statutory standards. See H. Lloyd, 'Plain English Statutes: Plain Good Sense or Plain
Nonsense?' [I9861Law Library Journal 683,692.
43. J. Wetter, 'Plain Language in Pennsylvania: Fading Issue or Development on the Horizon?',
(1985) 69 Dickinson Law Revjew 441,449.
44. s152.
45. s153.
46. For more restricted examples, see s19, Penalties and Sentences Act 1981 (Vic) and ss36 (5) and
37 (4) Prisons Act 1981 (WA).
47. 'Plain English Statutes and Readability', (1985) 64 Michigan BarJournal567,569.
48. Department of Justice, Canada: Access to Justice, Report No 1,41.
 However, there have been reports suggesting that some plain English
laws may actually impede bodies in redrafting their documents to make
them more c0mprehensible.~9Certainly, the limitations of 'objective'
plain English tests, such as the Flesch test,50 are enough to suggest that
any plain English laws should not impose objective criteria.
149 Considerable resistance to the enactment of generally applicable plain
English standards was exhibited in some responses to the discussion
paper. In the case of legal documents relating to consumers much of
the field is already covered. Competitive forces are bringing further
changes, particularly in the field of insurance. In the case of commercial
documents, very little of the field is covered. But the need for many
commercial clients to use their contracts not only to establish rights and
duties, but as working documents to ensure compliance by them, and
by other parties, is leading to a simpler and more straightforward style
of drafting in many commercial documents. The movement towards
simplifying the language and structure of legal documents is already
well under way on a voluntary basis. That movement is not restricted,
as are the North American plain English laws, to consumer contracts.
The Commission believes that the introduction of North American
style plain English laws might be counterproductive. The need for a
general plain English law has not been established.
150 The Attorney-General's Department has already had discussions with
the Law Institute of Victoria and the Victoria Law Foundation
concerning the setting up of a project to encourage implementation of
a plain English policy throughout the legal profession and the business
community. Such a project would constitute a valuable complement to
the steps already taken by the Government and to the recommendations
contained in this report for further implementation of the Government's
plain English policy in the public sector.
The Secretary to the Attorney-General's Department should
consult with the Law Institute of Victoria and the Victoria Law
Foundation with a view to setting up a program to implement
the Government's plain English policy in the private sector.
That program should concentrate initially on the standard
forms which have been prepared with the authority of the Law
Institute. It should then be extended to forms used by business
houses, including banks, real estate agents and insurers. The
steering committee for the program should include
representatives of the Law Reform Commission of Victoria and
of the proposed Legal Drafting Institute at Monash University.

49. H. Lloyd, 'Plain English Statutes: Plain Good Sense or Plain Nonsense?, [I9861 Law Library
Journal 683,692.
50. Paragraph 146.
7. IMPROVING ACTS AND REGULATIONS:
RECOMMENDATIONS

151 Adequate drafting training of lawyers and recruits to the Office of Chief
Parliamentary Counsel would lead to improved drafting. However,
attention must also be given to certain factors which contribute to the
difficulty faced by readers of Acts and regulations. These are of two
types. The first is a lack of a coherent policy in relation to the structure
of legislation. The second is the relatively unimaginative design and
appearance of Acts and regulations.

The structure of legislation

Relationship between the body of an Act and the schedules

152 Legislation consists of two main parts, an Act and regulations made
under it. The Act itself is often divided into the body of the Act and
appendages called 'Schedules'. The division of material between these
components is made largely on the basis of precedent. Restricted use is
made of Schedules.' Most of the legislative material is normally
contained in the body of the Act. As a result, Acts regularly state
numerous particular and quite narrow rules from which it is extremely
difficult to extract the underlying principles. The central message is
overwhelmed by a mass of peripheral detail.*
153 If the same amount of detail is to be preserved in legislation,
improvements ought to be made in the way in which that detail is
presented. One improvement would be to restrict the Act to a statement
of the principles of the legislative scheme, the details being transferred
either to Schedules to the Act, or to regulations made under it. The
Renton Committee proposed the first of these changes in those areas of
the law where it was necessary to maintain precision in detail:

1. Compare their use in Statute Law (Miscellaneous Provisions) Acts (Cth).

2. The problem is widespread. See Lord Scarman, English Law-The New Dimension, Stevens &
Sons, London, 1974,4.
 Where such detailed guidance is required in the Bill, it
should be contained in Schedules, and the main body of the
statute should be confined to statements of its principles.
This would enable those concerned primarily with principle
to find it set out uncluttered by the details of its application
and qualification^.^
154 The removal of many essential but not central provisions from the body
of an Act to a Schedule would be a considerable improvement.
Transitional provisions and provisions which set up a Tribunal or Board
and regulate its procedure are obvious candidates. This change appears
already to be under way.4 But the greatest benefit is likely to come from
the relegation to Schedules of qualifications and exceptions which at
present obscure an Act's central message. Take, for example, the
Companies (Acquisition of Shares) (Victoria) Code. The aim of that
Act is to regulate takeovers. It does so by requiring certain disclosures
of shareholdings and by imposing certain limits on the acquisition of
shares. But the level of shareholdings can be affected not just by ordinary
takeover conduct, but also by numerous other acquisitions. These include
acquisitions of shares-
by will
by allotment or purchase under varying types of prospectus
by pari passu allotment
by the exercise of a renounceable option, or an option or right
conferred by a convertible note
by the acquisition in certain circumstances of shares in another
corporation.
None of these is intended to be regulated by the Act. Nor are a number
of other acquisitions, including certain acquisitions in proprietary
companies having less than 15 members, and the acquisition of not
more than 3% of shares in each 6 months.
155 The original deals with all this by proscribing all acquisitions of shares
where that would result in a person being entitled to more than the
prescribed percentage of shares, and then setting out a long list of
exceptions. No less than five pages of exceptions follow the proscription.
Only then does the Act get to its central message, namely, that
acquisitions by means of a takeover scheme or a takeover announcement
(each of which is regulated by the remainder of the Act) are exempt
from the prohibition. This way of setting out the material is needlessly
confusing. What is of major importance is submerged by the sheer
volume of what is of lesser importance. In contrast, the plain English
version states the central principles at the beginning. The detail has
been relegated to a Schedule, with only a brief reference to it being
preserved in the body of the Act.5

3. The Preparation ofLegislation, Cmnd 6053, Sweet & Maxwell, London, 1975, paragraph 10.13.
See also paragraph 11.25.
4. See, for example, Guardianship and Administration Board Act 1986 (Vic).
5. Appendix 2 (Schedule 3).
 Chief Parliamentary Counsel should ensure that the body of
an Act commences with a clear statement of the relevant
principles and that, as far as practicable, the details and
qualifications which have to be included in the Act are relegated
to Schedules.

Relationship between Acts and regulations

156 The possibility of relegating some of the detail now contained in Acts
not to Schedules but to subordinate legislation (mainly regulations) was
also noted by the Renton Committee. However, it agreed with a
submission by the Law Society that:
the body of the Bill itself should contain the general
principles set out as clearly and simply as possible; detailed
provisions of a permanent kind should be contained in
Schedules to the Bill; and only details which may require
comparatively frequent modification should be delegated to
statutory instrument^.^
Whether that provides an adequate basis for deciding upon the allocation
of legislative material may be open to doubt. The need for ease of
modification is certainly a relevant factor. But that must be balanced
against the need for Parliamentary scrutiny of material which affects
private rights. Yet the regulation making power sometimes includes a
power to alter the effect of our Act by excluding persons or transactions
from its operation.' There may well be a need for guidelines to assist
Ministers and Parliamentary Counsel in deciding what material should
go into an Act and what should be left to regulations. The development
of those guidelines might result in a reduction in the material contained
in some Acts and a consequent improvement in the communication of
its central message.
157 A proposal to increase the amount of material left to regulations would
give rise to two practical concerns. The first is the fact that the
requirements imposed on Departments by the Subordinate Legislation
(Revocation and Review) Act 1984 (Vic), particularly in relation to
regulatory impact statements in respect of substantial changes to
regulations, have resulted in Departments seeking to have more, rather
than less, detail incorporated in the Act itself. The second is the fact
that Acts tend to be much more accessible than regulations made under
them. The reprint program and Anstat Pty Ltd services provide up to
date information on Acts. Anstat Pty Ltd provides a similar service in
relation to regulations. However, many regulations are unavailable
because they are out of print. The Gazettes in which they were originally
printed may be the only place in which they can be located. An improved

6. ThePreparation of Legislation, Cmnd 6053, Sweet & Maxwell, London, 1975, paragraph 11.25.
7. For example, Credit Act 1984 (Vic) s19. Generally, see D. Pearce, Delegated Legislation,
Butterworths, Sydney, 1977, paragraph 12f.
 service will ultimately be provided by electronic means. But not all
users will have access to that system. If more detail is to be left to
regulations, a better system of publishing and up-dating them will have
to be developed.
158 A proposal to increase the amount of material left to regulations might
also give rise to constitutional concern about the shift of power from
the Parliament to the Executive. However, the approach to the allocation
of material between an Act and the regulations made under it, already
differs markedly from one Australian jurisdiction to anotherS8Moreover,
the concern should be alleviated by the role played by the Legal and
Constitutional Committee of the Parliament under the Subordinate
Legislation Act 1962 (Vic).9 That Committee has wide responsibilities
in respect of all delegated legislation. The Attorney-General is required,
in consultation with the Legal and Constitutional Committee, to prepare
guidelines with respect to the preparation and content of statutory rules
and the procedures to be implemented for ensuring consultation, co-
ordination and uniformity in their preparation. In a wide variety of
cases, a regulatory impact statement must be prepared and public
comment must be invited and considered before the statutory rule is
made. Such a statement and all submissions on it must be forwarded to
the Legal and Constitutional Committee and the Department of
Management and Budget. On a variety of bases,1° the Legal and
Constitutional Committee may recommend that a statutory rule be
disallowed or amended and may even suspend the operation of a rule
pending its consideration by Parliament. Given these protections, the
risk arising from a transfer of detail from Acts to regulations would
appear to be minimal.
In consultation with the Cabinet Office, the Regulation Review
Unit and other interested bodies, Chief Parliamentary Counsel
should develop guidelines to assist Ministers, Departments and
parliamentary counsel in the allocation of legislative material
between an Act and the regulations made under it. In developing
the guidelines, Chief Parliamentary Counsel should take
account of the practical and constitutional concerns referred to
in this report. The guidelines should be presented for
consideration by the Government.

Reducing the total amount of legislative material

159 The comprehensibility of legislation would certainly be improved by

the development of criteria for the allocation of legislative material

8. Compare, for example, the Crimes (Confiscation of Profits) Act 1986 (SA) with the Crimes
(Confiscation of Profits) Act 1986 (Vic). The former is less than one-third the length of the
latter, partly because greater use will be made of subordinate legislation.
9. As amended by the Subordinate Legislation (Review and Revocation) Act 1984 (Vic).
10. Including the fact that the legislation 'requires explanation as to its form or intention': Subordinate
Legislation (Review and Revocation) Act 1984 (Vic) and s14 (1) (I].
 between the Act, its Schedules, and regulations made under it. But a
more radical change, involving an actual reduction in the total amount
of legislative material, may ultimately prove necessary. Concern over
the amount of detail contained in Acts is widespread. In 1975, the
Renton Committee examined this problem in some detail. It concluded
that the 'general principle' approach to drafting which is followed in
some European countries should be adopted wherever possible.
However, it recognised that this would involve some sacrifice ~fcertainty
and would place a heavier responsibility on the courts in applying the
resulting legislation. It also recognised that such an approach would
probably not be acceptable in relation to fiscal and other public laws
defining the rights and obligations of individuals in relation to the State.
For that reason, its recommendation was highly qualified:
we recommend that encouragement should be given to the
use of statements of principle, that is to say, the formulation
of broad general rules, whether or not the subject matter of
the Bill is considered by the Government to call for detailed
legislative guidance, through one method or
another ... Where such detailed guidance is required in the
Bill it should be contained in Schedules, and the main body
of the statute should be confined to statements of its
principles. This would enable those concerned primarily
with principle to find it set out uncluttered by the details of
its application and qualifications.ll
160 The relationship between statements of principle and detail has also
been examined by Sir William Dale.12 Dale contrasted the English
legislative drafting style with those adopted in France, Sweden and
Germany. He did so against the background of the English and Scottish
Law Commissions' criterion of intelligibility: a statute should be drafted
so that it 'can be understood as readily as its subject matter allows, by all
affected by it'.13 English legislation did not meet this criterion. Its
obscurity was the result of several factors including 'much detail, little
principle'.14 By contrast, lucid and often succinct drafting was to be
found on the Continent:
The continental lawmakers, influenced by their heritage of
codes, think out their laws in terms of principle, or at least
of broad intention, and express the principle or intention in
the legislation. This is the primary duty of the legislator-
to make his general will clear.15
By no means all Continental legislation was drafted in terms of principle.
However, even when it contained detail comparable with that in an
English statute, it rarely suffered from the defects common to the

11. The Preparation ofLegislation, Cmnd 6053, Sweet & Maxwell, London, 1975, paragraph 10.13.
12. Legislative Drafting: A New Approach, Butterworths, London, 1977.
13. The Interpretation of Statutes, Law Corn N o 21, Scottish Law Corn N o 11, 1969,3.
14. W. Dale, Legislative Drafting: A New Approach, Butterworths, London, 1977, 331.
15. At 29.
 latter.16 Dale concluded that English drafting would be improved if
drafters were to be 'less fussy over detail ... more general and concise'.
Much could be done by improvements in style and arrangement. But a
more profound change was also desirable:
A determination to seek the principle, to express it, and to
follow up with such detail, illuminating and not obscuring
the principle, as the circumstances require."
161 Nowhere has a reduction in legislative detail been more forcefully
advocated than in the judgment of Sir John Donaldson MR in Merkur
Island Shipping v Laughton.18 Having noted the difficulties faced by
unions and management in understanding the relevant legislation, the
Master of the Rolls absolved the drafter of the legislation from
responsibility for those difficulties:
I do not criticise the draftsman. His instructions may well
have left him no option. My plea is that Parliament, when
legislating in respect of circumstances which directly affect
the 'man or woman in the street' or 'the man or woman on
the shop floor', should give as high a priority to clarity and
simplicity of expression as to refinements of policy ...When
formulating policy, ministers, of whatever political
persuasion, should at all times be asking themselves and
asking parliamentary counsel: 'Is this concept too refined to
be capable of expression in basic English? If so, is there
some way in which we can modify the policy so that it can
be so expressed? Having to ask such questions would no
doubt be frustrating for ministers and the legislature
generally, but in my judgment this is part of the price which
has to be paid if the rule of law is to be maintained.19
162 Any proposal for a reduction in the detail contained in legislation and
for greater reliance to be placed on statements of principle raises complex
questions of two types. The first is a constitutional one. A reduction in
legislative detail might be seen to involve a transfer of power from the
legislature to the judiciary and the executive. The less the detail
contained in an Act, the more necessary it would become for
administrative tribunals or the courts to 'flesh out' the relevant
provisions. T h e role of administrative bodies might expand.
Developments of these types would take place at the expense of the
legislature. The legislature would need to retreat from ground it now
occupies. The second question is one of costs. It concerns the impact of
such a change on the general public, on administrators and on the
courts. The less detailed the legislation, the more open it would become
to dispute in its application to particular circumstances. Additional costs
would be involved in the increased exercise of administrative or judicial
discretions and in increased litigation. These would have to be set

16. At 332-3.
17. At 335.
18. 119831 1 All ER 334,351.
19. At 351.
 against the benefits of simpler legislation, including, in particular, the
flexibility which might be introduced in relation to the exercise of
administrative discretions.*O These matters are not considered further
in this report. They would require a separate study. That study would
only become necessary if it proved impossible to achieve an appropriate
level of intelligibility of legislation while preserving the present level of
detail.

The Design and Appearance of Legislation

163 The comprehensibility of legal documents is often affected by poor

design and layout and by a lack of adequate aids for finding information.
This is a particular problem with legislation. Improvements could be
made in a number of areas, including typography, headings, the use of
visual aids, cross-referencing, the provision of examples, and indexing.

164 Possible improvements include:

The use of running heads at the top of each page to indicate the
sections included on the page, and the Part and Division in which
they are located.
The use of larger type for the section number and its relocation in
the margin to make it easier to find.
The positioning of the section number beside the section heading to
make the heading an integral part of the section and to use the
number and heading in combination to divide the section from the
previous one.
The making of a sharper contrast between the style of section headings
and Part and Division headings to facilitate access to information.
The printing of Schedules in the same size of type as the body of the
Act; it is not necessary to use a smaller type to differentiate the Act
from its Schedules; other typographical devices could be used for this
purpose.
The use of an attractive, modern typeface that is as readable as the
type used in popular publications.
A number of these proposals have been adopted in the revision of the
Companies (Acquisition of Shares) (Victoria) Code in Appendix 2.
None would increase costs for the Government. They would save costs
for the community and for the legal profession, in particular.

20. This was the basis for the call by the Victorian Attorney-General for a Takeovers Code which
stated general principles and reposed substantial discretion in the National Companies and
Securities Commission.
Headings

165 Headings should also be improved. At present, they are often cryptic
and uninformative. In some cases, a radical approach may be required.
Headings, particularly headings to sections, could be phrased in the
form of questions to which the relevant provisions then provide the
answer. That was tried in early drafts of the Residential Tenancies Bill
1985 (Vic). Headings such as:
a What form must a tenancy agreement be in?
a What if the agreement is not in the standard form?
a What are the allowed terms for ending a tenancy?
a What if the premises are specially needed by the landlord?
a How much rent must a tenant pay?
a How often can rent be increased?
a Does a receipt have to be given for rent?
add substantially to the accessibility of a Bill to affected members of the
public-in this case, landlords, agents and home renters. This device
has been used recently in the Planning and Environment Act 1987
(Vic). It should be used much more widely.
166 Considerable use could also be made of headings in order to limit the
scope of the sections themselves. A heading which makes it clear that
the section only deals with takeover schemes, for example, saves
continual reference to those schemes in the body of the section. There
has been considerable confusion over the status of section headings.
Under section 36 (1) of the Interpretation of Legislation Act 1984 (Vic),
headings to Parts and Divisions form part of an Act. Section headings,
however, do not.21Section headings were originally marginal notes. It
was often said that marginal notes could not be used to assist in the
interpretation of a statute. However, this approach was questioned by
Street CJ in 1983:
The often-repeated authoritative statements that marginal
notes are inadmissible guides to construction are generalities
based upon the danger of taking them at face value. If this
danger be wholly removed by authenticating the marginal
note, then the reason underlying the inadmissibility
...
principle is displaced and that principle ceases to apply to
the marginal note in question.
T o the objection that Members of Parliament take no
responsibility for the reliability of marginal notes as distinct
from the text of sections, it could be answered that it is high
time that they did. Marginal notes are plain to be seen in the
printed Bill as well as the Act, and it could well come as a
surprise to many Members of Parliament, and to the public
at large, to be told there is an arbitrary and inflexible rule
precluding any reference to marginal notes as an aid to
 construction. I not only see no justification for such an
arbitrary and inflexible rule, but I see every reason in
common sense and in law to permit such reference when
the marginal note is properly a ~ t h e n t i c a t e d . ~ ~
Whatever the position at common law, the Interpretation of Legislation
Act 1984 (Vic) makes it clear that any relevant matter or document may
be used to assist in the interpretation of a statute. Consequently, while
section headings may not be part of an Act, they may be used in
interpreting a statute and this fact should be borne in mind by those
who draft them.

167 There is considerable scope for cross referencing in the margin in both
Acts and subordinate legislation. One case where that might be done is
in relation to definitions. The use of definitions provides a particular
difficulty for readers of sections using defined words. This difficulty
could be readily overcome if the reader's attention were drawn to the
fact that a particular word or phrase in a given section is defined
elsewhere in the Act. Word processing equipment readily identifies
every use of a word in a document. Each use of a defined word could be
highlighted in some way and a cross-reference to the location of the
definition could be included in each case. This has been done in the
case of the re-drafted Companies (Acquisition of Shares) (Victoria)
Code in Appendix 2.
168 A more ambitious form of cross-referencing would provide valuable
assistance in understanding the importance of amending legislation. At
present, an amending Bill can often be understood only if read with the
principal Act. For example, the 1985 amendment to the Nurses Act
1958 (Vic):
In section 45 of the principal Act-
(a) in paragraph (ja) after the words 'nurses' agents' there
are inserted the words 'and inspection of the mode of
business of nurses' agents' ... 23
gives no indication at all of the significance of the change. It is necessary
to refer to the Nurses Act 1958 (Vic) as well to make sense of the
amendment. That causes quite unnecessary difficulty for Members of
Parliament, in particular. T o assist them, at least, amending Bills should
substitute, in appropriate cases, whole paragraphs or subsections for the
existing ones rather than simply delete, insert or substitute words or
phrases. The words and phrases to be deleted, inserted or substituted
might be highlighted by bold type or italics. The latter practice is
sometimes followed in the Commonwealth Parliament in relation to
substantial amendments. It does not affect the Bill itself but takes the

22. The Ombudsman v Moroney [I9831 1 NSWLR 317,335.

23. Nurses (Amendment) Act 1985 (Vic), s13.
 form of a memorandum from the responsible Minister, showing relevant
sections of the principal Act with the proposed amendments. A similar
procedure should be considered in Victoria. The possibility of printing
amended Acts in a similar manner for members of the public should
also be examined. Some commercial organisations have used
highlighting techniques to indicate corrections to reports or amendments
to articles of associations. These systems allow readers to see at a glance
where the changes have occurred and what words have been added or
deleted.

Use of examples

169 The intelligibility of Acts could also be improved by the use of examples
showing how provisions apply to particular cases. Tests at the
Communications Design Centre in Pittsburgh have shown that readers
construct stories or episodes to help them understand abstract rules or
complex procedures. This is known as the scenario principle.24Drafters
should capitalise on it. Newspapers sometimes adopt the practice when
they are trying to explain government policies on such matters as fringe
benefits tax or assets exemptions. The St.Pau1Fire and Marine Insurance
Company followed the same principle in its Personal Liability
Catastrophe Policy, setting out the policy first and then providing
illustrations printed in italics:
If a liability covered by this policy is not covered by another
policy of yours or anyone else insured, we'll pay claims you
legally have to pay up to the limit listed on the attached
declarations page. However, you'll have to pay a small
deductible of 50% up to the first $500-in other words, no
more than $250.
You've boarded your neighbours' poodle while they're away
on vacation. You're careless and the poodle runs away and
gets lost. Your neighbours insist on you paying for the loss.
If he was an ordinary poodle worth say $400, you pay $200
and we pay $200. But if he was a prize-winning show dog
worth $4,000, you pay $250 and we pay $3,750.
170 The Consumer Credit Act 1974 (U.K.) is an example of what might be
done in the case of legislation. Schedule 2 to that Act contains no less
than 24 examples of the application of the Act's new terminology to
particular circumstances. These are preceded by a table setting out the
new terms, the sections where each is defined and the examples relevant
to each of them. Examples 1 and 11 are set out below:

24. L. Flower, J. Hayes & H. Swartz, Revising Functional Documents: The Scenario Principle
Communications Design Centre, Carnegie-Mellon University, Pittsburgh, 1950, Technical
Report No 10.
 Example 1
Facts. Correspondence passes between an employee of a
money-lending company (writing on behalf of the company)
and an individual about the terms on which the company
would grant him a loan under a regulated agreement.
Analysis. T h e correspondence constitutes antecedent
negotiations falling within section 59 (1) (a), the money
lending company being both creditor and negotiator.
Example 11.
Facts. X (an individual) borrows 500 pounds from Y
(Finance). As a condition of the granting of the loan X is
required-
(a) to execute a second mortgage on his house in favour
of Y (Finance), and
(6) to take out a policy of insurance on his life with Y
(Insurance).
In accordance with the loan agreement, the policy is charged
to Y (Finance) as collateral security for the loan. The two
companies are associates within the meaning of section 184
(3).
Analysis. The second mortgage is a transaction for the
provision of security and accordingly does not fall within
section 19 (I), but the taking out of the insurance policy is a
linked transaction falling within section 19 (1) (a). The
charging of the policy is a separate transaction (made between
different parties) for the provision of security and again is
excluded from section 19 (1). The only linked transaction is
therefore the taking out of the insurance policy. If X had
not been required by the loan agreement to take out the
policy, but it had been done at the suggestion of Y (Finance)
to induce them to enter into the loan agreement, it would
have been a linked transaction under section 19 (1) (c) (11 by
virtue of section 19 (2) (a).
Similar initiatives should be tried in Victoria, either in Acts themselves
or in accompanying explanatory material.?5

Use of visual aids

171 Words are not the sole means for conveying ideas. Formulas, charts and
maps are sometimes preferable vehicles. Take subsection 13 (4) of the
Construction Industry Long Service Leave (Amendment) Act 1985
(Vic):
For the purposes of subsection (3) the 'prescribed amount'
is an amount equal to the amount that bears the same

25. G.C. Thornton, Legislarive Drajing, 3rd ed, Butterworths, London, 1987, 46.

95
 proportion to the amount paid to the person as the period of
service bears to the total period of service in respect of which
payment was made.
T o apply this provision, it is necessary to construct a mathematical
formula:

period of service in the

construction industry in
Victoria
prescribed -
- amount
X
amount paid
period of service for
which payment was
made.
While some readers may be able to make the necessary translation in
this case, in others, formulas are quite indi~pensable.~~
172 Similar considerations apply to the use of maps and charts, particularly
in relation to complex survey or geographical descriptions. Can anyone
doubt that a map would have been preferable to the following description
of a 'controlled area' in the Transport (Tow Truck) Regulations 1983
(Vic):
Division 2-Operation Within a Controlled Area
60 The following area is declared to be a controlled area for
the purposes of these Regulations (hereinafter referred to as
'the controlled area'), namely that area bounded by a line
drawn from the coastline at Mornington Jetty along
Schnapper Point Drive, Main Street, Tyabb Road, Yuilles
Road to its intersection with the railway line, following the
railway line to its intersection with Moorooduc Road, along
Moorooduc Road, to its intersection with Frankston-Flinders
Road then in an easterly direction to the intersection of
Robinsons Road and Dandenong-Hastings Road, along
Dandenong-Hastings Road to its intersection with Bayliss
Street, then in an easterly direction to the intersection of
Narre Warren-Cranbourne Road and Punt Road, then in a
northerly direction along Narre Warren-Cranbourne Road
to its intersection with Main Street, along Main Street to its
intersection with A'Beckett Road, then north to the
intersection of Belgrave-Hallam Road and Horswood Road,
along Belgrave-Hallam Road, Mountain Flat Road and
Wellington Road to its intersection with Belgrave-Gembrook
Road, then in a northerly direction to the intersection of
Queens Road and Lewis Road, along Lewis Road to its
intersection with Hunter Road, along Hunter Road to ...
[and so on, for another 28 lines].

26. M. Casen and J. Steiner, 'Mathematical Functions and Legal Drafting', (1986) 102 Law Quarterly
Review 585.
Providing indexes
173 The absence of indexes is a major defect in legislation. This fact was
noted by the Legal and Constitutional Committee in its 1983 report on
the Interpretation of Legislation Bill 1982 (Vic). It recommended that:
All future Bills and, where appropriate, subordinate
instruments should be accompanied by indexes and tables
of contents. These should be produced in a detachable form
so as to facilitate their updating when amendments to Acts
and Regulations are made.
The development of appropriate word processing programs and the
emergence of professional indexers has made the production of indexes
simpler and less costly. In the case of complex legislation, in particular,
indexes are indispensable aids to understanding. Discussions are taking
place between Chief Parliamentary Counsel and the Victorian
Government Printer with a view to the production of indexes for all
major Acts. That program should be extended to subordinate legislation.
Indexes are simply indispensable to clear communication in a highly
complex functional document.
In consultation with the Cabinet Ofice, the Regulation Review
Unit, the Victorian Government Printer and other interested
bodies, Chief Parliamentary Counsel should develop a new
design for Acts and regulations. The new design should
incorporate improved cross-referencing systems and indexes for
all major legislation. It should be presented for consideration by
the Government.
The Commission has experimented with a number of page formats
which might replace the present one. Two pages of the Mental Health
Act 1986 are reproduced as Appendix 6 of this report. The revised
format is on the left-hand page; the original is on the right. The revised
format is presented only to indicate the extent to which improvements
might be made. It is not put forward as a final revision.
8. REWRITING EXISTING LEGISLATION AND
GOVERNMENT FORMS:

RECOMMENDATIONS

174 The recommendations in the preceding chapters would leave untouched

the vast amount of legislation and other legal documents which
incorporate defects of the types examined in chapter 2. Special
recommendations are required if the Government's plain English policy
is to be implemented in those documents. Given the costs which they
impose on Government and on the community there can be little doubt
of the need to rewrite and redesign major items of legislation and forms
and documents in common use.

Rewriting legislation

175 The redraft of the Companies (Acquisition of Shares) (Victoria) Code

contained in Appendix 2 establishes that existing legislation can be
redrafted in plain English without loss of precision. But a redrafting
program raises questions of cost. Changing existing legislation is different
from writing new legislation. New legislation has to be drafted anyway.
For the reasons given earlier, drafting it in plain English should involve
savings rather than costs. In the case of redrafting existing legislation,
however, all the costs are additional ones. Those costs would only be
justified if substantial benefits will be gained from a rewriting program.
Most of the benefits of a rewriting program are the same as those
discussed earlier in relation to the drafting of new legislation. They
include a significant reduction in administrative costs for the
Government and compliance costs for business and the general
community. But a number of additional benefits would flow from a
rewriting program. These include:
staff development opportunities in the form of extensive training in
plain English drafting, leading to considerable early improvement in
the drafting of original legislation
the symbolic and educational value for the legal profession and the
business community in the expression of the Government's
commitment to plain English in legislation.
 It is, of course, not possible to quantify the benefits of a rewriting
program in money terms. Moreover, the benefits and the costs of
rewriting legislation would vary from one subject to another. In the case
of rarely used legislation, the benefits would be small and would not
justify the costs of the rewriting. In the case of heavily used legislation,
such as the Credit Act 1984 (Vic), the benefits would be substantial and
would outweigh the associated costs of rewriting.
176 In Victoria, the Next Decade the Government announced its decision to
establish new programs for business deregulation.' The areas in which
initiatives are to be taken include the review and rewriting of Acts in
plain English. The Commission has conferred on this subject with Mr
Robert Miller, the Director of the Regulation Review Unit, and with
Chief Administrators of Government Departments and Agencies. It has
concluded that the most cost-effective approach would be to establish a
program which gives priority to legislation whose rewriting would
produce the greatest benefits.
A legislation rewriting program should be established. It should
be aimed at a limited number of important Acts (say, 50) and
regulations made under them.
The program should be monitored closely and should be reassessed
after it has been in operation for an adequate period. T o minimise
interference with the discharge of the on-going duties of the Office of
Chief Parliamentary Counsel and to provide the necessary management
and consultative mechanisms, the Commission recommends that
responsibility for the program should be given to it in the form of a
reference from the Attorney-General. T o minimise interference with
the Government's legislative program, special procedures should apply
to the consideration of the redrafted legislation. Chief Parliamentary
Counsel should be required to examine the plain English redraft to
draw attention to any differences between it and the original legislation
before it goes forward for consideration. A standing reference should
be given to the Legal and Constitutional Committee of Parliament to
report on the accuracy of the redrafted legislati~n.~
177 During consultation, concerns were expressed about the rewriting of
Acts whose policy was being substantially revised by the responsible
Department. It was suggested that the rewriting program should not
apply to those Acts; they would be rewritten by the Office of Chief
Parliamentary Counsel when policy revision was complete. The
Commission recognises that if the revised policy is radically different
from the original, it would be preferable to leave the original alone
pending the development of the new legislation. However, those cases
would be rare. In most cases, a rewriting program should go hand in
hand with the policy revision. Policy revisions, including changes which
Ministers decide upon as the result of the discovery of anomalies during
the course of the rewriting program, should be accomplished in the

2. The details of a proposed program, including management and consultative procedures and
costings, are set out in Appendix 7.
 usual way, by means of inclusion of a Bill in the Government's ordinary
legislative program. The plain English Bill would incorporate all policy
changes and its passage through Parliament would take place as soon as
convenient after the passing of the amending Bill. In some cases, the
amendments might even be incorporated in the plain English Bill itself,
the policy changes being clearly noted in the Minister's second reading
speech and open for debate in the usual way. Under the Commission's
recommendations, the decision on these matters would be made by
Cabinet. In setting priorities within the rewriting program, Cabinet
would be able to reallocate particular tasks to the ordinary legislative
program.

Rewriting Government forms

178 Implementation of the Government's plain English policy in relation

to existing forms has already commenced in some Government
Departments and Agencies, notably the Attorney-General's Department,
the Ministry of Planning and Environment and the Ministry for Police
and Emergency Services. T h e experience in E n g l a ~ ~and
d , ~in Victoria4
so far shows that there would be considerable benefit to the Government
and to the general community if the plain English policy were
implemented throughout the public sector. However, implementation
is likely to be uneven, and the realisable benefits put at risk, unless a
clear program is established, monitored and reported on.
179 Two main possibilities have been suggested. Under the first,
implementation would be the responsibility of individual Departments
and Agencies. An administrative direction could be given to all
Departments and Agencies requiring them to implement the
Government's plain English policy. T h e direction would be
accompanied by guidelines which indicate priorities, methods and
deadlines. Each Department and Agency would be required to include
in its Annual Report details on its response to the direction and on costs
and benefits of its work on implementing the plain English policy.
Under the second possibility, a special unit would be established and
responsibility would be given to it for the implementation of the plain
English policy throughout Departments and Agencies. It would identify
areas where benefits could be maximised. It would assist Departments
and Agencies in developing action plans. It would provide consultancy
services, particularly in relation to training. It would monitor
performance and provide overall reports to the Government on the
implementation of the plain English policy.
180 The Commission believes that the latter of these two approaches would
be far more effective than the former. In the absence of an established
infrastructure within individual Departments and Agencies,
administrative directions are unlikely to produce a sufficient response.

3. Paragraph 101.
4. Paragraph 105.
 Moreover, both the Government and the general community would be
best served if priorities were to be established on a system wide basis
and if areas of greatest benefit were to be targeted immediately.
A small Plain English Unit should be established to assist in
the implementation of the Government's plain English program
in relation to existing forms and documents. The Unit should
provide consultancy services to Departments and Agencies and
should monitor implementation of the plain English policy. It
should be dissolved within three years.
181 Given the leading role played so far by the Attorney-General and his
Department in the implementation of the Government's plain English
policy, the Unit should be attached to the Attorney-General's
Department. However, it should report to a Steering Committee which
should include representatives of other bodies as well. Given its overall
responsibility for promoting efficiency in the public service, the Public
Service Board should be represented. The Regulation Review Unit
should also be represented in view of its related proposal for a Forms
Management Centre and a proposed Paperwork Reduction Act. Because
of the importance of the project to the community at large, consumer
and business interests could also be represented. The Unit's work should
be split into Three phases. In phase 1, the Unit's efforts should be
concentrated on Departments and Agencies which are heavily involved
in the delivery of services involving a high level of contact with clients,
and on Departments and Agencies whose responsibilities involve
regulation of the business community, in particular. In phase 2, the
Unit's efforts should be concentrated on Departments and Agencies
with high levels of internal standardised communications. If poorly
designed, these can lead to delay and inconvenience for members of the
public through inefficiency of decision making. In phase 3, the Unit
should monitor progress against lodged action plans. The Unit's tasks
should be completed, and the Unit dissolved, within three years.5

5. Further details concerning the proposed Unit, including its management structure and costs,
are set out in Appendix 8.

102
INDEX

Paragraph
Accident Compensation Act 1985 (Vic) ............................................... 34
Acts Interpretation Act 1901 (Cth) ....................................................... 91
Amendment of legislation ..................................................................... 74
Anstat Pty Ltd services ........................................................................ 157
Attorney-General for Victoria (the Hon J H Kennan) ...........................1
Bank Polski v Mulder ........................................................................... 145
Baxt, Professor R ................................................................................. 116
Benson, Professor Robert ...................................................................... 63
Bills
particular drafting problems, ........................................................ 74
Bills of Exchange Act 1882 (U.K.) ..................................................... 145
Business regulation
Commonwealth by, ..................................................................... 4 , 7
New South Wales in ....................................................................... 8
Victoria in. .................................................................................. 176
Business Regulation and Licencing Report
New South Wales in ,....................................................................... 8
Button, Senator ....................................................................................... 7
Cabinet Handbook ..............................................................................132
Canada Legislation Training Programme ......................................... 114
Citizens
as audience of legislation,.......................................................... 67ff
obligation of government to communicate with, ...................96, 99
Class actions
United States in, ............................................................................ 97
Common law
as cause of legalese. ....................................................................... 29
presumption against derogation from. ..........................................91
Commonwealth
Annual Report of Parliamentary Counsel. ............................. 62. 72
Commercial and Drafting Division. ...........................................134
Constitution. .................................................................................. 61
Government attitude to adoption of plain English .....................4. 7
Legislation Handbook. ................................................................ 125
Legislative Drafting Institute ...................................................... 113
 Paragraph
process of legislative drafting. ..................................................125ff
survey of legislation. ...................................................................32ff
Communication
betwen citizen and Government. ...............................................96ff
Communications Design Centre .......................................................169
Companies (Acquisition of Shares) (Victoria) Code ..........35. 37.42.44.
50. 55.86. 106.
154. Appendix 2
Computers
as aids to drafting,........................................................................120
Confidentiality
concerning proposed legislation, ................................................142
Constitution ........................................................................................ 61
Construction Industry Long Service Leave (Amendment) Act 1985
(Vic)....................................................................................................1 71
Consumer Credit Act 1974 (U.K.) .....................................................170
Costs of poor drafting .......................................................................... 100
savings of plain English ,........................................................ lolff
Covenant and Agreement under Historic Buildings
Act 1981 (Vic) ..........................................................11, Appendix 4
Credit Act 1984 (Vic) ........................................36, 56, 99, 142, 147, 176
Criminal Code 1901 (Queensland) ..................................................... 145
Cross-referencing in legislation ................................................. 41, 167f
Dale, Sir William ................................................................................160
Dangerous Goods Act 1985 (Vic) ...................................................52-54
David v Heckle (1984) ...........................................................................97
Debasement of language .......................................................................59
Dickerson, Professor Reed ..........................................................115, 148
Discussion paper
plain English concerning, ...............................................................3
Doctrine of due process ..................................................................9 99
Donaldson, Sir John ......................................................................95, 161
Drafting
formal teaching of, ................................................................... 11Off
Drafting of legislation
absence of underlying principles in, .............................................42
amendments to, .............................................................................74
Bills ................................................................................................74
central message within an Act, .....................................................52
criticism of, ..............................................................................12, 15
cross-referencing in, ......................................................................41
defects in ,................................................................................ 33ff, 9
guidelines for, ..............................................................................133
instructions for, ...........................................................................133
judges by, .......................................................................................25
language problems, .................................................................... 33ff
organisation problems, ...............................................................47ff
possible role for private practitioners in ,.................................. 140ff
present style of, .............................................................................. 13
 Paragraph
recommendations for improvement of. .................................. lO8ff
regulations. ........................................................................ 134ff
repetition in. ............................................................................ 84
separation of related material when ,.................................... .........55
software for use in, .................................................................... 122
structure of whole Act ............................................................ -52
sufficient time for. ...................................................................... 73
unnecessary concepts in. ................... . . .................................... 37
use of electronic aids in. ........................................................ 120
Drafting Manual ................................................................. Appendix 1
Dreidger. Professor Elmer .............................................................. 114
Eagleson. Professor Robert
plain English and. .................................................................... 72
secondment of .............................................................................. 2
Ejusdem generis maxim .................................................................. 89
Electronic aids to drafting ............ . ................................................ 120
Engle, Sir George ............................................................................. 74
Entry, search and seizure powers .................................................... 133
Epistle Project ............................................................................. 122
Examples
use of, in legislation ,............................................................... 170
Exolanatorv texts ..................... . . ..................................................... 83
Expressio unius est exclusio alterius maxim .................................... 89
Fair Trading Act 1985 (Vic) .............................................................. 46
Fees
..

length of legal documents and, ............................................ 2 7, 28

Flesch Test ...................................................................................... 146
Foreign Proceedings (Excess of Jurisdiction) Act 1984 (Cth) .............18
Forms
in Victoria .................................................................................... 105
Management Centre,.............................................................. 181
rewriting proposal, .................................................................... 178
Franchise Agreements Bill ............................................................... 15
French effect on legal language of, ................................................. 21ff
Futures Industry Act 1986 (Cth) ...................................... . , 73, 106
General expressions
in place of lists of particular expressions, ............................ 85
Generalia specialibus non derogant maxim, ...................................... 89
Government policy
need to communicate with citizens ,........................................... 96
role of parliamentary counsel in formulation of ,.....................129ff
Gowers, Sir Ernest ................................................................... 62, 63, 64
Great Fingall Consolidated Ltd v Sheehan .......................................... 90
Guarantee agreement ....................................................................... 19
Guardian Assurance Co v Underwood Constructions (1974) ..................16
Gulbenkian 's Settlement I n re (1968)................................................... 30
Guidelines
for allocation of material between Act and regulations,.............158
for drafting instructions, ........................................................ 133
 Paragraph
Hackett.Jones. G ......................................................................... 129, 130
Headings in legislation ...................................................................... 165
Holmes, Dr Virginia ........................................................................... 106
Housing loans .......................................................................................78
IBM Watson Research Centre .......................................................... 122
Indexes in legislation .........................................................................173
Instructing officers
parliamentary counsel and, ......................................................... 133
Insurance Contracts Act 1984 (Cth) ..............................................99, 147
Interpretation of Legislation Act 1984 (Vic) ................................91, 166
Judge Fiendish ........................................................................ 26 (f.n. 19)
Judges drafting of legislation by, ......................................................... 25
Latin
effect on legal language of ,.................... . . . .............................21
Law-French .......................................................................................... 21
Legal and Constitutional Committee .........................................158, 173
Legal Drafting Institute
proposal for ,..................................................................... 116, 150
Legal language ................................................................................ 14ff
legislation and ,........................................................................... 15
mixed linguistic history of ,........................................................21ff
private legal documents and ,.........................................................16
significance of Parliamentary supremacy for, ........................... 25
Legalese ............................................................................................... 17
causes of ,..................................................................................... 20ff
legislative example of, ................................................................. 18
non-legislative example of, .......................................................... 19
Legal words and phrases
plain English and, ......................................................................... 80
Legislation
absence of statement of underlying principle in ,......................... 42
audience of, .......................................................................... 6 7 f f
design and appearance of, ....................... . .............................. 163
drafting of, see Drafting of legislation
examples in ,................................................................................. 170
explanatory texts in relation to,................................................... 83
headings in, ............................................................................... 165
indexes in ,.................................................................................... 173
interpretation of, ........................ . . ...........................................89
marginal notes in, ................................................................... 1 6 6
reduction of amount of ,.............................................................. 159
reduction of detail in, ............................................................... 162
relationship between Act and regulations ,..................................156
relationship between Act and Schedules, ................................152ff
rewriting of, ............................................................................... 175
savings where in plain English ,...................................................106
schedules to Acts, ............................ . . ......................................152
structure of, .............................................................................. 152ff
survey of, in Victoria, .................................................................... 32
 Paragraph
typography in ,................... . ................................................... 165
use of examples in, .....................................................................169
visual aids in, ............................................................................... 171
Legislation Handbook ............................................................. 125ff
Legislative drafters
see Parliamentary counsel
..
Legislative Drafting Institute .................................... .....................113
and see Legal Drafting Institute, Training
Life Insurance Act 1945 (Cth)........................................................... 48
Loorham, Chris .................... . . ........................................................ 15
Marginal notes in legislation ............................................................... 166
Maxims ................................................................................................ 89
Mental Health Act 1986 (Vic) ....................... . . ................................. 49
Merkur Island Shipping v Laughton (1983) ................................ 95, 161
Miller, Robert ...................................................................................... 176
Monash University
as site for Legal Drafting Institute ......................................... 116
Mortgage over business form ......................................... 1 1, Appendix 5
Mylward v Welden (1565) ...................................................................... 28
New South Wales
attitude to adoption of plain English .............................................8
Noscitur a sociis maxim .................... . ............................................ 89
Nurses Act 1958 (Vic)...................... .
.. ........................................ 168
Obudsman v Moroney (1983) ......................................................... 166
Palfrey, Brian .......................... . . . . . ............................................. 107
Parliament
as primary audience of draft legislation, ......................................68
supremacy in law making of, ........................................................ 25
Parliamenrary counsel ...................................................................... 62
........
Canada in, ................. ........................................... 1 14, 117
clarification of role of, ................................................................. 123
Commonwealth Office, of,............................ 62, 72, 124, 125, 127
drafting of regulations and, .....................................................134ff
.
.
instructing officers and ,................ ........................ 124ff, 133
legislative policy and, ...................... ....... ...............................129
present experience of, .............................. . . . ...........................118
proposed qualifications for, .................................................. 1 17
Victorian office of ,................. . . ................... 2, 3, 13, 109f, 110f,
117,128f, 133, 134f, 140f,
151,158,173, 176
training of, .................................................................................. 111
Penal provisions
statutory interpretation of, ......................................................... 90
Pengilley, Warren ...................... .................. 56
Plain English ........................................................................................ 1
average citizen and, .............................. . . .................................67
clarity and, ............................................................................ 62ff
debasement of language as, ....................... . .............................. 59
Flesch Test for ,........................................................................ 146
 Paragraph
forms in ,....................................................................................
lOlff
importance of, ............................................................................ 93ff
in documents creating rights and duties, ...................................81ff
laws in North America, .............................................................. 146
legal words and phrases and, .........................................................80
objections to, ...............................................................................
57ff
precision and, ......................................................................6lff, 80
role of legislative drafters, ...........................................................123
statutory interpretation and ,..........................................................84
time saving and ,............................................................................. 76
translation into, .............................................................................77
Plain English legislation ................................................. 1, 106, 146, 148
Planning and Environment Act 1987 (Vic)........................................165
Pleadings
excessive length of ,........................................................................ 27
Policies on Business ................................................................................4
Policy officers
parliamentary counsel and, ..............................................124ff, 133
Precedent
legalese as cause of, ....................................................................... 29
Precision
plain English and, ................................................................6 1 80
Private legal documents
commercial, .................................................................................149
interpretation of, ...........................................................................92
legal language and, ........................................................................ 16
plain English laws concerning, ................................................146ff
Private practitioners
possible role in drafting legislation of, .....................................140ff
R v Bolton; Ex parte Beane (1987) .......................................................... 91
Razor Gang .........................................................................................
113
Recommendations arising from Report
adoption of Drafting Manual, .....................................................109
amendment of Cabinet Handbook, ............................................132
design for Acts and regulations, .................................................173
development of software program, .............................................122
diversification of parliamentary draftsmen's experience, ...........119
establishment of Legal Drafting Institute ,..................................117
establishment of Plain English Unit, ..........................................180
guidelines for allocation of material between Act and
regulation, ...................................................................................
158
guidelines for drafting instructions,............................................133
improvement of clarity of drafting,..........................................108ff
institution of plain English policy in Victoria, ...........................150
responsibility for drafting regulations, ........................................139
rewriting of legislation, ...............................................................176
role of private practitioners in drafting legislation, ....................145
statements of principle in Acts,...................................................155
Regulation Review Unit ..................................................................... 176
 Paragraph
Regulations
see Subordinate legislation
Renton Committee ............................................................. 1 5 3 156. 159
Residential Tenancies Bill 1985 (Vic) ....................................... 1 6 5
Review of Chief Parliamentary Counsel's Office ................. .. 141
Rewriting
of Government forms. ...................................................... 1 7 8
of legislation. ............................................................................... 175
Rights and duties
...
in legal documents, .................... ........................................ 81ff
.
Rule of law ............................ . . ................................................. 94ff
Sale of Goods Act 1893 (U.K.) ........................... .............
...................145
Schedules to Acts .......................... . . ............................................. 152
Sentences
complexity of, ......................................................................... 35ff
length of ,....................
. ..... . ..................................................... 34
Sexton, Noel ......................................................................................113
Social Security Act 1947 (Cth) .............................. .........
......................15
Software
use of, in legal drafting,.............. .
.. .......................................122
South Australia
attitude to adoption of plain English, ........................... ........... 5
Statements of principle
in place of listing particulars, ................................................... 88
Statutory interpretation .............................................................. 84, 89
of penal provisions ,...................................................................... 90
Subordinate legislation
drafting of, ................................................................................ 134ff
indexes in ,..................................................................................173
relationship between Act and regulations ,......................... 1 5 6
Subordinate Legislation (Review and Revocation)
Act 1984 (Vic) ............................................................. 136ff, 157
Subordinate Legislation Act 1962 (Vic) ................................... 135, 158
Summons and Information ....................................... 11, Appendix 3
Tasmania
attitude to adoption of plain English, ......................... ............ 6
Takeovers Code ................................................. 3 5 37, 42, 44, 50, 55,
86, 106, 154, Appendix 2
Training
legal drafters of, ..................... . . .......................................... 109ff
parliamentary counsel of, ....................................................... 109ff
Transport (Tow Truck) Regulations 1983 (Vic) ...................... . ......172
Typography ............................ . ............................................... 164ff
Unfair Contracts Act 1980 (N.S.W.) .................................................... 99
United Kingdom
plain English forms in, ......................................................... lOlff
United States
class actions in, ..................... . ....................................................97
plain English laws in, ............................ . . ............................146
 Paragraph
training of legislative drafters in. ................................................115
Uniform Commercial Code. (U.S.A.) ...........................................99
Van der Waul v Goadenough (1938) .......................................................16
Victoria
Office of Chief Parliamentary Counsel. ..............2. 3. 13. 109. 110.
117.128ff. 133. 134ff. 140ff.
151. 158. 173. 176
process of legislative drafting in. .................................................128
survey of legislation in ...................................................................32
Visual aids
use of. in legislation. ....................................................................
171
Wilson v Knubly (1806) ......................................................................... 25
Weinstein. Judge ...................................................................................
97
Word processors
as aids to drafting.........................................................................
120
 I asked him to come to meet me tomorrow and
mean while, would he note do m on paper his precise
thoughts as to whether or not Humphrey is overstretched
and send them over to me.
An hour later his though& arrived, duknoted. These
are t h y :

H M Treasury
Permanent Secretary
March 2

Dear Prime Minister,

When I said that HA was not overstretched, I was of

course talking in the sense of total cumulative loading
taken globally rather than in respect of certain individual
and essentially anomalous responsibilities which are not,
logically speaking, consonant or harmonious with the broad
spectrum of intermeshing and inseparable functions and could
indeed be said to place an excessive and supererogatory
burden on the office when considered in relation to the
comparatively exiguous advantages of their overall
consideration.

Yours ever,

I read it carrfulk several times. My conclusion: he

could do part $Hum phrejs job.
I LAW REFORM COMMISSION OF I T T o T n n T *
 ACKNOWLEDGEMENT
Back cover reproduced from Yes Prime Minister, Volume 1 , by Jonathan Lynn
and Antony Jay, with the permission of BBC Enterprises Ltd.

ISSN 0818 7320

ISBN 0 7241 6561 6
Law Reform Commission of Victoria

Appendix 1

PLAIN ENGLISH
AND THE LAW
Guidelines for
Drafting in
Plain English

A Manual for
Legislative Drafters
 -

TABLE OF CONTENTS

Paragraph Page
INTRODUCTION 1
CHAPTER 1. 3
WRITING PLAINLY 3
Plain language 3
Completeness 4
Organisation and layout 4
Modern approach to communication 4
An illustration 5
CHAPTER 2. 7
T H E PURPOSE BEHIND WRITING 7
The impact of purpose on writing 7
Revealing the purpose of Acts 8
Preambles 8
CHAPTER 3. 11
T H E AUDIENCE 11
Part 1: The audience of legislation 11
a. Members of Parliament 11
b. People affected by legislation 11
c. Officials 11
d. Judges and lawyers 12
Part 2: Meeting the needs of the audience 12
Using the practices of the community 13
Formulas, maps, charts and tables 13
Omit unnecessary material 13
Avoid unnecessary concepts 15
CHAPTER 4. 17
ORGANISATION 17
Part 1: The importance of organisation 17
Important itemsjirst 18
Assessing importance 18
Revealing the organisation 19
Title of an Act 19
Headings 20
 Paragraph Page
Part 2: Using the structural units of an Act in 20
organisation
Levels of structure 43
Parts and Divisions 44
Labelling of Parts and Divisions 45
Sections 46
Labelling of Sections and Subsections 47
Subsections 48
Paragraphs and subparagraphs 50
Paragraphing to avoid ambiguity 53
Conjunctions between paragraphs 54
Labelling of paragraphs and 57
subparagraphs
Sub-subparagraphs 58
Schedules 59
Explanatory footnotes 60
Index 61
Part 3: Special problems in organisation
Cross-references 62
Special circumstances 68
CHAPTER 5.
GRAMMATICAL STRUCTURE 69
Length and complexity of sentences 70
Order of clauses within a sentence 73
Order of sentence components 74
Do not separate auxiliary and main 75
verb
Do not separate the subject 76
and the verb
The adverbial 77
Active or passive voice 78
Nouns from verbs 83
Positive or negative 84
Cohesion among sentences 87
CHAPTER 6.
VOCABULARY 89
Part 1: Aspects of legal vocabulary 90
Litigated words 90
Terms of art and other technical terms 91
Ordinary words with a special legal meaning 93
Archaic words 95
Latin and French words 98
Doublets and triplets 99
Overlapping words 100
Inflated words 101
Elegant variation 102
Part 2: The use of words in amending legislation 103
Part 3: The meaning of words 104
Definition section 104
Functions of definition section 106
 Paragraph Page
a. To confine a word to only part of its
range of meanings
b. To promote understanding where a
usage is only partially established in the
community, for example, i n vitro
fertilization, disinflation and joint float.
c. To avoid ambiguity where a word has
competing usages, for example,
"bimonthly" means twice a month.
d. To remove uncertainty, for example,
"spouse" includes de facto spouse;
"amended" includes "altered"; and
c c ~ ~ n ~ includes
t r ~ ~ t reconstruct,
yy make
structural changes.
e. To explain technical words, especially
legal ones, for example, information in
the sense o f laying a charge.
f. To make the document shorter and more
readable by using a shorthand
expression, for example, "odd lot"
means aparcel of shares that is less than
a marketable parcel.
g. To identify words which have the same
referent.
Equivalents and definitions
Commonness of definitions
Unnecessary definitions
Generality of definitions
Consistency in definition
No substantive material in definitions
Drafting definitions
Using the computer to prepare definitions
Where to put definitions
CHAPTER 7.
USAGE OF CERTAIN WORDS
And-or-and/or
Any-all-each-every
Deem
Duty (it shall be the duty ofl
Forth with
Gender neutral language
Hereby
Lawful (it shall be lawful for)
Money
Other-otherwise
Punctuation
Quantiry
Referential words
Save
Shall
 Paragraph Page
Spelling
Such
Subjunctive words
That/which/whose
Time
Whatsoever- wheresoever- whosoever
FURTHER READING
INDEX
 INTRODUCTION

1 This manual has been prepared to help implement the Government's

policy to have legislation written in plain English. It should be read
with the Law Reform Commission's Report Plain English and the Law
which explains what plain English is, the reasons why it should be used
and how it should be written. The Law Reform Commission of Victoria
believes that Acts, regulations and associated forms and statements
should be not only legally sound but also easy to read. This will benefit
the whole community and increase the efficiency of government.
The main aim of this manual is to help people involved in legislative
drafting to prepare Acts which communicate their message efficiently
and effectively. It is not a complete guide to plain English drafting and
does not cover the technical legal matters that are dealt with in traditional
manuals on legislative drafting. It focusses on particular forms of
language which research has indicated lead to difficulties and
misunderstanding. These deficiencies in language arise independently
of the other causes of faulty legislation and can be eliminated by drafters
themselves.
3 The manual is intended to be more than a set of guidelines. It draws on
findings, knowledge and skills outside the law to explain why certain
steps need to be taken to achieve effective communication. The object
is to give drafters greater freedom and to help them to take a broad view
of their role as communicators of the law. Although the manual is
directed principally to drafters of legislation, it applies to all types of
legal documents.
4 The basic principles and objectives set out in the manual are not novel.
They have long been accepted and followed by many in the legal
profession and leading writers on legislative drafting have proposed
rules aimed at improving the intelligibility of legislation since the middle
of the last century. The history of the plain English movement,
particularly in its application to legislation, is described by the Law
Reform Commission in its Report.
5 The measure of success for legal writing is not how well drafters manage
to sound like lawyers but how well they achieve accuracy of content
combined with plainness of expression. This manual is directed towards
achieving that plain expression.
 CHAPTER 1.

WRITING PLAINLY

6 Drafters of legal documents must state the relevant rules or standards

exactly. But it is not enough to represent the facts accurately and
formulate the law correctly. Drafters must do so in language which is
immediately intelligible to their audience. They fail in their
responsibilities as writers if they have not presented the facts and law
clearly. Readers expect to make an effort to understand the subject
matter in a document, but they should never be required to struggle
with the language of the writers. Obscure or convoluted writing can be
avoided for there is an alternative available in plain English. It is
language in which the meaning is immediately clear. A document is
written in plain English if it conveys the writer's message in an effective
and efficient manner. As Professor Dickerson observed:
The ideal draft is the one that the legislative audience will find
the easiest to understand and to use.'
7 The main justification for plain English is simply that people have the
right to be informed in language which they can understand, of benefits
to which they are entitled, and obligations which are imposed on them.
This is only fair. It is part of the rule of law and was strongly endorsed
by the Law Reform Commission in its Report. Misunderstanding and
ignorance of the law diminish people's ability to comply with laws and
jeopardise their exercise of their rights. Moreover, parliamentarians
should understand what is submitted to them for enactment. Provisions
cannot be properly debated if they are not fully comprehensible.

Plain language

8 Plain English is not a simplified form of English or a type of basic

English. On the contrary, it is a full version of the language, including
all features of normal adult English. It is not limited to a small vocabulary
nor to a simple grammatical structure but it may vary depending on the

1. K. Dickerson, Materials on Legal Drafting, West Publishing, St Paul, Minn, 1981,28.

 audience and the subject. It may use an uncommon technical word if
the readers are specialists, or introduce alternatives and explanatory
notes if they are non-expert. It may differentiate in its treatment of
statutes which concern the whole community, such as traffic laws, and
those which concern primarily only a special section, such as laws on
the admissibility of evidence. Plain English means plain or clear to the
intended audience which includes not only judges and lawyers but also
parliamentarians, government officials and those affected by the
legislation.

Completeness

9 T o achieve legal precision, a plain English document contains a

complete and accurate statement of the rules or standards. It is not a
simplified statement. Every essential item of information is present. It
must be if the document is to protect the rights of the affected parties
in relation to the benefits conferred, or the obligations imposed.
However, plain English is rigorous in excluding material that is
unnecessary or outmoded.

Organisation and Layout

10 Plain English requires not only plain language but also proper
organisation and layout. This was stressed by the Law Reform
Commission in its Report. For example, it said that iflegislation is to be
readily comprehensible, its central message should be introduced early in
the document2 and the general layout of the Act should be carefully
planned before drafting commences. Poor organisation may obscure
underlying principles. The text should be structured according to the
interests and priorities of the readers. This will help them to absorb its
message. The organisation of the text should be highlighted by its
design features. These guide readers to the relevant information.

Modern approach to communication

11 The use of plain English does not alter or jeopardise the law. It makes
it clearer and easier to understand. It is an efficient and modern form
of communication. It incorporates knowledge from linguistics,
psychology and typography about how people write and how they read.
It is not a new style of writing that is alien to the legal profession or is
being imposed from outside. There are lawyers today-as there always
have been-who write plainly.

2. Paragraph 52.

4
An illustration

12 The following example, although it is not a legislative provision,

illustrates the major principles set out in the following chapters. It is
the charge or direction given by a court official to jurors in Victoria.
The version in use in 1986 read:
Members of the jury, the prisoner ABC is charged with
XYZ. T o that charge he has pleaded not guilty and for his
trial has placed himself upon God and his country, which
country you are. Your duty therefore is to say whether he is
guilty or not guilty. Hearken to the evidence.
13 The purpose of this direction is to explain to the jurors what they are
required to do. Jurors are ordinary citizens with little knowledge of the
law and little experience of court cases. For many of them, service on
the jury would be their first experience of a court room. T h e direction
explains to the jury that they must listen to the evidence and decide
whether the accused is guilty or not. But look how it does it. First, it
introduces archaic legal words which are unfamiliar to jurors. Take for
instance, placed himself upon God and country. What do these words
mean? What has God to do with the trial? From the average person's
point of view, a court case involves the police trying to prove a charge
against the defendant. It does not involve God at all. Again, take which
country you are. T h e jurors have no idea what country means in this
context. The word hearken is even more obviously archaic. These terms
have no place in a modern court room. They are more likely to make
the legal proceedings seem ridiculous than to add an aura of solemnity
to them. T h e content of the charge may also be criticised. It separates
the task of reaching a decision from the method by which jurors reach
a decision, that is by weighing the evidence. T h e direction does not
state the important connection between weighing the evidence and
making a decision on the basis of that evidence.
14 The jurors would understand their duties better if the direction read:
Members of the jury, the prisoner ABC is charged with
XYZ. He has pleaded not guilty. Your duty is to listen to the
evidence that is to be placed before you in this trial and to
decide from it whether he is guilty or not.
This direction means the same as the first. For example, listen means
the same as hearken. The second direction is more accurate than the
first because it spells out the link between listening to the evidence and
forming a conclusion. It is clearer and more modern not only because
the language is modified but also because the needs of the audience and
the real content have been identified. Good clear writing springs from
good clear thinking-thinking about the purpose, the audience and the
necessary content of the document.
 CHAPTER 2.

T H E PURPOSE BEHIND WRITING

15 The purpose of a document determines not only its contents but also its
format and the language in which it is written. This chapter explains
how the purpose of an Act should be taken into account in drafting.

The impact of purpose on writing

16 All writers should consider the purpose of a document before

commencing drafting. If the purpose is clearly understood at the outset,
the document can be limited to essential information. Readers will not
be burdened with irrelevant material which may distract them from the
central message. The material can be presented in the right order and
with the right emphasis. It can be written in a style which is appropriate
for the document. For example, instructional manuals use sparse
sentence patterns to enable readers to move quickly from one instruction
to another, for example: Unlock button I, Depress button 5, Slide button
2 up. All functional documents refer to concepts meticulously by the
same name. In an Act about building societies, readers do not mind
having the words building society, Memorandum of Association, and
Registrar repeated hundreds of times. This repetition helps readers as
they concentrate on the powers, obligations or privileges set out in the
Act. If, on the other hand, the document is a literary work, to give
readers aesthetic pleasure, such repetition would be tedious.
17 When writers have identified the purpose of a document, they should
make that purpose clear to the audience. No publication occurs in a
vacuum. It is sparked by an identified need and must be interpreted in
the context of its background. A statement of purpose provides readers
with an understanding of the background to the document and gives
them a context in which to interpret it. It allows readers to start from
the same point as the writer.
Revealing the purpose of Acts

18 Acts in particular should begin with an informative statement of their

purpose setting out what Parliament intends to achieve. Each Act
changes the law. If its purpose is clearly stated, readers can readily
understand the significance and intended scope of the change.
19 Before the Ministerial Statement Plain English Legislation 6 May 1985,
Victorian Acts contained both a long title and a short title. The long
title consisted of a statement of the purpose or scope of the Act. Long
titles have now been abandoned and the material which would formerly
have been placed in the long title should be placed in the purpose
section (section I).'
20 Some Victorian Acts also have a separate objectives section (for example,
the Guardianship and Administration Board Act 1986 and the Mental
Health Act 1986). This distinction is artificial and should not be
maintained. It is confusing for readers to encounter in different places
two sets of statements that are obviously related. The purpose section
should contain all statements of objectives. It should not be so broad
that it does not clearly indicate the scope of the Act.
21 In order to avoid listing all minor and ancillary matters covered by the
Act, the purpose section may conclude with the words and for related
purposes. Related is more specific than other which has been used in the
past in Victorian Acts. Statements of purpose may also be used to
introduce Parts of an Act.

Preambles

22 Legal documents often start with a preamble which explains their

background and the reasons for them. Parliamentary procedures require
preambles in private Bills. However, in other legislation, they are
outmoded and should be abandoned. They often contain material that
is already known, is obviously inconsequential or appears elsewhere in
the document. Occasionally they state the historic or socially important
reasons for an Act. For example, the preamble to the Aboriginal Cultural
Heritage Bill 1986 has obvious political significance:
The Parliament of Victoria acknowledges-
(a) the occupation of Victoria by the Aboriginal people
before the arrival of Europeans;
(6) the importance to the Aboriginal people and to the
wider community of the Aboriginal culture and
heritage;
Other examples are the Australia Acts (Request) Act 1985, the Land
(Miscellaneous Matters) Act 1985 and the Forests (Wood Pulp

1. Parliamentary procedures still require Bills to retain a long title but there is no need for it to be
reprinted in an Act since the purpose section covers the same ground.

8
Agreement) (Amendment) Act 1985. If it is essential to include
information on the background to or reason for an Act, that material
should be placed in the purpose section of an Act. The Housing
(Commonwealth-State-Northern Territory Agreement) Act 1985 shows
how this can be done:
Purpose
1. The purpose of this Act is to ratify the execution of and
to approve an agreement between the Commonwealth
and other States and the Northern Territory of Australia
relating to housing.
The agreement itself was printed in a Schedule.
 CHAPTER 3.

T H E AUDIENCE

23 , In order to prepare documents which are readily comprehensible to

their audience, writers must develop an awareness of the audience, its
interests and needs. The first part of this chapter examines the audience
of legislation. T h e second part suggests ways of improving
communication from the perspective of the audience.
24 Part 1: T h e Audience of Legislation
T h e audience of legislation consists of four main categories of readers:
Members of Parliament, the people affected by the Act, the officials
administering the Act, and judges and lawyers.
a. Members of Parliament
Parliament has ultimate responsibility for the words in an Act
and Members of Parliament are readers of draft legislation
prepared for their consideration by Parliamentary Counsel.
Draft legislation must therefore be instantly intelligible. This
speeds the work of Parliament, saves unnecessary questions
and debate and, above all, ensures that Members of Parliament
are fully aware of the implications of their decisions. Any
obscurity may be dangerous, for experience has repeatedly
shown that obscure language or faulty structure may
camouflage inadequacies in content.
b. People afJected by legislation
Once an Act has been passed, it is obviously of vital concern to
the people affected by it. The statement of law must be clear
to help them understand their rights and obligations. It is
inefficient if Parliament passes laws that need to be interpreted
for the intended audience. People may not understand what
they are entitled or required to do and may not appreciate that
they need expert advice.
c. Officials
Officials who administer Acts and regulations may need to read
them more frequently than others in the community. Most
officials are not lawyers. Acts and regulations must be written
in such a way that they can readily appreciate their meaning.
Otherwise, they may misinterpret the law and infringe citizens'
 rights, or impose burdens on Government, in a way not
intended by the legislation.
d. Judges and lawyers
The aim of Parliament is to enact legislation that can be readily
understood by those affected by it. The courts should be seen
not as the primary audience of legislation but as a remedy if
there is a failure in communication. An Act that can be
understood by certain sections of the community and officials
should not present any difficulties for judges and lawyers but
should be even easier for them to comprehend.
Part 2: Meeting the Needs of the Audience
T o communicate effectively to their audience, drafters must consider
the knowledge and interest of the readers and the way that they are
likely to read the text. Drafters should consider from the readers'
perspective questions such as the following:
What are the main points to be emphasised?
Are there any misconceptions about the subject in the community?
How much background material needs to be included?
What information is new to readers?
What level of detail must be used to help them understand and act?
What tasks will readers Lave to carry out?
Which terms will readers understand at once and which will need to
be explained?
It is impractical to require that every document be immediately
understood by everyone who reads it. Some legislation deals with
complex or highly specialised subjects which are difficult in themselves
for people who have no training or experience in the area. Documents
on an advanced part of a subject would run to impossible lengths if
writers had to cover first principles and go through every detail each
time they wanted to write. However, legislation should be readily
comprehensible by those who are immediately affected by it. For
example, a company director or a corporate lawyer knows what a takeover
offer is. Therefore, a drafter may reasonably use the term takeover offer
in legislation dealing with takeovers without fear of misleading or
puzzling the most concerned audience. A certain amount of knowledge
in the audience has to be assumed although it must always be
remembered that Members of Parliament are also part of the audience
of legislation and that they are not all corporate lawyers or economists.
The amount of knowledge that can be assumed in drafting legislation
is therefore more limited than it may be with other legal documents.
The structure of a statute, like the language, should be considered from
the readers' perspective. The matters which are most important for
readers should appear first. For example, substantive provisions should
appear before procedural provisions such as the date of commencement
of the Act.
Labels for people or things should also be chosen from the readers'
perspective. In a section of the De Facto Relationships Act 1984 (NSW)
 dealing with court proceedings, de facto partners are called parties to the
application. Most readers to whom the Act might apply would see
themselves as partners and not as parties to court proceedings. T o draft
the Act from the readers' perspective, the court section should have
referred to partner making an application. Similarly, an amending Act
should not refer to the Act to be amended as the Principal Act but
should refer to it by name. The term Principal Act is familiar to drafters
but not to readers. The use of Principal Act does not necessarily save
space. In the Water Sewerage Authorities (Financial) Act 1985, six of
the seven Parts are concerned with amendments. Each of these six Parts
is concerned with amending a different Act. So in the space of eight
pages, the reader has to cope with six different meanings of Principal
Act. In Part VII the convention is raised just to make one change and
occupies 2.5 times the space of the title of the Act.

Using the practices of the community

28 Formulas, maps, charts and tables. If formulas, maps, charts and tables
are the usual way in which particular items of information are handled
in the community, then it is proper to use them in legislation. Section
4 6 of~ the Construction Industry Long Service Leave Act 1983 inserted
by section 13 of the Construction Industry Long Service Leave
(Amendment) Act 1985 asks readers to cope with the following wording:
For the purposes of sub-section (3) the "prescribed amount"
is an amount equal to the amount that bears the same
proportion to the amount paid to the person as the period of
service in the construction industry in Victoria bears to the
total service in respect of which the payment was made.
T o apply this provision readers have to convert these words into a
mathematical formula:

~ e r i o dof service in the

construction industry in
Victoria
prescribed - amount
- ,,
amount paid
period of service for
which payment was
made.
It was the job of the drafter to do this job for them (indeed the drafter
probably translated some such formula into words to produce the
provision!). Acts need to become more like other technical publications
in their use of devices in addition to words.
29 Omit unnecessary material. Drafters must be rigorous in selecting the
material to be included in a document. Unnecessary material conceals
the main points. Consider, for example, subsection 33 (3) of the
Companies (Acquisition of Shares) (Victoria) Code:
 (3) If, after the making of a take-over announcement in
relation to shares in a company and before the end of the
period in which offers constituted by the take-over
announcement remain open, being a take-over
announcement made on behalf of a natural person or on
behalf of two or more persons at least one of whom is a
natural person, that natural person, or if there are two or
more natural persons, either or any of them-
(a) dies;
(b) becomes bankrupt; or
(c) is declared by a court to be incapable of managing
his affairs,
such of the offers made by virtue of the take-over
announcement as have not been accepted shall be deemed
to have been withdrawn on the day on which the person
died, became bankrupt or was declared to be so incapable,
as the case may be.
Much of the information in this section could have been omitted.
Readers are already well into a document on takeovers by the time they
reach section 33. They have already been through the procedures for
making an announcement so that the context is clear. Even if they are
following up a cross-reference and are just consulting this section, they
would be aware of its background. The opening four or five lines could
be dispensed with for there is no need to traverse again the making of
the announcement. The closing lines are repetitious. Without the
extraneous material, the subsection may be written as follows:
An offer that has not been accepted is withdrawn when-
a) the offeror or one of the offerors-
i) dies; or
ii) becomes bankrupt; or
iii) is declared by a court to be incapable of managing
his or her affairs ...
iv) is placed under official management; or
v) commences to be wound up; or
vi) becomes subject to a provisional liquidator.
Plain English version, Companies (Acquisition of Shares)
(Victoria) Code
Pertinently worded sections-such as this one-reduce the burden on
readers and help to ensure that they get the essential message.
There is a temptation to regard some material as essential for precision
but often this is a false argument as subsection 71 (2) of the Credit Act
1984 illustrates:
The amount of a charge in respect of the deferral of the
payment of an amount payable under a credit sale contract or
a loan contract determined in accordance with this sub-section
is ... (emphasis added)
All the words in italics should be omitted. The use of the in front of
deferral and the fact that subsection (2) follows subsection (1) and is part
of section 71 make it obvious that the deferral being talked about in (2)
is the same as the one in (1). Subsection (2) can be reduced to :
2) The amount of the charge for the deferral is ...
 This taut wording adds to precision by concentrating on the main idea.
30 Avoid unnecessary concepts. Similarly, the introduction of unnecessary
concepts should be avoided. For example, it is not necessary to introduce
the concept eligible person in section 19 (2) of the Adoption Act 1984.
The material could have been inserted directly into section 19 (1) so
that instead of commencing:
19 (1) An eligible person may apply ...
it would read:
19 1) The adopted child to whom the adoption order relates,
or a natural parent of the adopted child, or an adoptive
parent of the adopted child, or the Director-General or the
Principal Officer of the approved agency by which the
adoption was arranged may apply ...
This approach saves readers from having to cope with the information
dressed up as a concept whose meaning they then have to master and
apply.
 CHAPTER 4.

ORGANISATION

31 The success of a document in communicating depends greatly on the

careful organisation of the material in it. The right facts must not only
be selected, but must also be put in an order that shows the
interconnections between the facts, that allows one fact to support or
qualify the other. Incisive clarity of thinking, sensitive consideration of
the audience, skilful choice of language, and thoughtful attention to all
the other components in the writing process can all be undermined by
slipshod organisation.
32 The first part of this chapter concerns the importance of the organisation
of a document in making it comprehensible and discusses the principles
to be considered in arranging material. The second part suggests ways
in which the structural units of an Act may be used in organising it.
The third part mentions some problems in organising material in Acts,
such as cross-referencing.

Part 1: The Importance of Organisation

33 Proper organisation helps both writers and readers. For writers, it

provides a valuable internal check on their control of their material.
They can see gaps in information, jumps in reasoning, duplication,
overlap and omissions. The exercise of arranging the material in order
clarifies and tests their thoughts. Are they logical? Do they fit neatly
together? Are they needed at all? For readers, proper organisation enables
them to grasp the writer's message more quickly. Reading is essentially
a learning activity. Readers learn efficiently and effectively if they can
proceed by carefully graded steps, moving from easier to more difficult,
from known to unknown material.
34 Writers must organise their material in order to ease readers into the
topic, and to provide them with sufficient background material to
interpret it. They must structure the document to give readers the
information they want as quickly as possible. If the document flows in a
logical sequence, readers see at once how the text will unfold. Proper
organisation is as important to readability and comprehensibility as the
choice of vocabulary and sentence structure.
 5 Readers of legislation have particular needs. Often they approach an
Act with specific problems or questions in mind. They are not likely to
read the Act from beginning to end. This is certainly true if they are
consulting the Act for a second or later time. They use the Act by
referring to the particular sections and subsections which are relevant
to the issue at hand. Proper organisation helps them find the material
required without having to read or reread the whole Act. Writers should
use all the devices employed in other publications to help readers to
locate information quickly.

Important items first

36 Some items in an Act are more important than others. These should
come first and should be made to stand out. This is what readers expect
and they may overlook or underestimate the main point in the Act if it
is buried in the middle of the text. Also, if the material is arranged in
an hierarchical fashion, reserving the positions at the beginning of the
Act, or of a Part or Division, for the most important items, readers are
more likely to remember them. Readers pay more attention to the
opening Parts and spend more time on them.
37 Acts should start with the important substantive provisions. The current
practice of commencing with a less important provision, such as when
the Act commences and whether it binds the Crown should be
abandoned.' Similarly, definitions need not appear at the beginning of
Acts. They are better placed at the end with words which are defined
being highlighted in the text.* In Parts or Divisions of the Act also, the
most important provisions should be placed first. In the setting up of a
Commission, for example, the duties of the Commission should precede
its composition, the tenure of members, payment, annual reports and
so on. Indeed many minor and ancillary matters can be relegated most
satisfactorily to Schedules.

Assessing importance

38 Importance is a relative concept. What is important in a given context

may vary depending on one's interest or point of view. In writing,
drafters should decide what is important from the readers' perspective
and not from their own. That material should then come first. For
example, if injured workers and their representatives consult the
Accident Compensation Act 1985, their prime concern is the
compensation available for injuries and their eligibility for it. They are

1 . The current commencement sections are rarely helpful in any event as they frequently say This
Act comes into operation on a day or days to be proclaimed. This leaves readers to find out the
critical information elsewhere. The commencement provision should appear at the end of the
document as the expiry provision generally does.
2. See paragraph 118.
 less interested in the matters with which the Act starts-the
establishment of the Accident Compensation Commission and the
Accident Compensation Tribunal. The payment of compensation is in
fact not dealt with until Part IV. This is to approach the subject from
the bureaucrats' or lawyers' orientation rather than from the public's.

Revealing the organisation

39 Writers should reveal a document's organisation to readers so that they

can see the direction which it is going to take. Introductory structural
or procedural paragraphs may be used to explain what is to come and
the order in which it is to appear, for example:
This chapter is about organising, writing, and designing
documents so that information is readily accessible to readers.
In the following sections, we will:
Illustrate the problems in two special documents.
Suggest some techniques for making the information in
documents accessible to readers.
Discuss some of the reasons that non-academic writing is
so often poorly organised.
Consider the applications of these findings for teachers of
composition.
Explore the need for further research on non-academic
writers and documents that they write.3
There is scope for descriptive statements like this in Acts, especially at
the beginning of Parts and Divisions. They give readers an overview of
what is to come. It is immaterial that such opening paragraphs are not
part of the law. Published Acts should communicate the law and make
it clear to the intended audience. There is no reason why they should
be a flat, unhelpful statement of the law. There are, moreover,
typographic devices which would enable these paragraphs to be set
apart from the rest of the text.

Title of an Act

40 The title of an Act serves a dual purpose. It identifies the Act by giving
it a distinctive label and it broadly indicates its subject matter. T h e title
is used in indexing the Act and, carefully constructed, it helps people
find the law more easily. If the Act has a general title which may cover
a range of subjects, it may be helpful to indicate its subject matter by a
more specific description in brackets, for example:

3. J.C. Redish, A.M. Battison, E.S. Gold, 'Making Information Accessible to Readers', Writing in
Nonacademic Settings, Guildford, New York, 1985, 129, 131.

19
 Infertility (Medical Procedures) Act.
Building Control (Plumbers, Gas Fitters and Drainers) Act.
Sale of Land (Allotments) Act.
Motor Car (Photographic Devices) Act.
Forest (Wood Pulp Agreement) (Amendment) Act.
For ease of reference, the title should be as brief as it is informative and
as indexing requirements allow.

Headings

41 The headings in a document are a useful device for revealing its

organisation and act as signposts to assist readers in locating information.
They allow informed readers to recognise at once the sections they can
omit and those that they need to read closely. They assist readers not
only in their first contact with the document but whenever they need to
refer to the document again. For these reasons, headings must be as
informative as possible. For example, Part I1 Division 2 of the
Professional Boxing Control Act 1985, which deals with the registration
of boxers and not with others connected with the sport such as promoters,
managers and trainers, should be headed Registration of Professional
Boxers, not simply Registration as it is at present. The proposed revision
is not only more self-explanatory but it is far more useful in locating
information.
42 Headings should describe the content and not try to summarise it.
Taken together, all the section headings should give a reasonable
indication of the contents of an Act. Headings may be in the form of
questions resembling the type of questions that users of an Act are likely
to ask:
What are the duties of applicants?
When does the right to compensation arise?
When does the Act begin?
Readers seem to find headings in the question form more helpful. They
are also useful for drafters when they check the accuracy of a section:
does it answer the question satisfactorily?
Each heading should be short and, with sections particularly, no longer
than a line. If any heading is longer than this, perhaps the section is too
long and should be divided.

Part 2: Using the Structural Units of an Act in Organisation

Levels of structure

43 The accepted arrangement of Acts, with their various units and levels
of structure, is well suited to allow the material to be organised
 methodically and presented in manageable segments that readers can
absorb easily. The possible levels of structure are:
[Contents]
Part
Division
Section
Subsection
Paragraph
Subparagraph
Sub-subparagraph
Schedule
[Index]
The relationship between the levels is hierarchical. Divisions occur
within Parts, subsections within sections and so on. However, only the
section is an indispensable element. Every Act contains sections. All the
other levels are optional; whether any of them is used depends on the
nature of the material and its length. As a result, a Part may consist of
sections and dispense with Divisions; a section may contain paragraphs
and not subsections. Schedules do not form part of the central hierarchy.
They are supplementary and contain secondary or subordinate material.
A table of contents and an index form an outer layer of structure,
functioning as guideposts to the location of items within an Act.

Parts and Divisions

44 Sections in many Acts fall into coherent groups, with each group forming
a unit of information. If the groups are presented as Parts, the
relationship between the sections in each group is then revealed visually.
Readers can immediately identify the Part of the Act which interests
them and see all the sections relevant to that matter. Drafters can also
refer to a group of sections more easily if a cross-reference is necessary.
Parts may be organised in Divisions which show that particular groups
of sections within a Part are closely related and function as a unit.

Labelling of Parts and Divisions

45 Parts and Divisions should be labelled with Arabic and not Roman
numbers. The beginning of a new Part or Division and its separation
from other Parts and Divisions can be emphasised by typographic
treatment.

Sections

46 An Act may consist of one provision, a small number of provisions or a

range of them which may be grouped in various ways. The section is
 the vehicle for carrying a provision, so it is the basic unit of structure in
an Act. Sections-and subsections also-usually consist of only one
sentence, but this is a general practice and not an obligatory rule. When
two ideas in adjacent sentences form a close-knit unit, the sentences
should be kept together in the same section or subsection, for example:
1 ) T o vary an offer, the offeror must serve on the target
company a notice-
a ) signed in the same way as Part A statement must be
signed; and
b) setting out the terms of the proposed variation and
particulars of any necessary modifications of the
statement; and
c) if the variation will postpone the offeror's obligation
to provide the consideration for a period exceeding
one month-stating the effect of subsection 23(1).
The offeror must send a copy of the notice to each offeree
in an approved manner.
(Plain English version, subsection 21(1) Companies
(Acquisition of Shares) (Victoria) Code)
There is no justification for contorting the language or producing a
cumbersome sentence just to force the ideas into the one sentence.
Subsection 80 ( 1 ) of the Property Law Act 1958 provides further
evidence that the convention does not need to be followed mindlessly:
A covenant and a bond and an obligation or contract under
seal made after the thirty-first day of January One thousand
nine hundred and five shall operate to bind the real estate as
well as the personal estate of the person making the same if
and so far as a contrary intention is not expressed in the
covenant, bond, obligation or contract.
This sub-section shall extend to a covenant implied by virtue
of this Part.

Labelling of Sections and Subsections

47 Sections should be labelled with Arabic numbers in the margin. They

should be labelled consecutively from the beginning of an Act even if
the Act is divided further into Parts and Divisions. Subsections should
be labelled with Arabic numbers in brackets in line with the text.

Subsections

48 Sections may be divided into subsections if this helps to present the

material in a more manageable way for readers, for example, if it avoids
long complex sentences. Each step in a process or procedure may then
be allowed a separate sentence, and each sentence-and hence step-is
 clearly signposted for the reader by a subsection number. The message
is revealed both by grammatical structure and by layout. This approach
may be used even if the section itself is not very longe4
49 Each subsection must form a coherent unit. Its contents must fit in with
the heading of the section in which it is included. Because it forms a
unit, it is seldom necessary to repeat material from one subsection to
the next, for example:
Appeals against certtjied assessments
s 3 0 (~1 ) An employer or working sub-contractor to whom a
certified assessment under section 30 applies may within
fourteen days from the date of service of notice of that
certified assessment appeal to the Industrial Relations
Commission in Court session.
(2) The Industrial Relations Commission in Court session
may hear and determine an appeal against a certified
assessment ...
(3) If in the hearing of an appeal against a certified
assessment evidence is produced which is not available to
the Board when making the assessment the Commission
upon receiving an application from the Board to do so may
return the matter to the Board for a further assessment.
(4) In hearing an appeal against a certified assessment the
Commission may determine the amount of long service leave
charges to be paid by the employer to the Board and any
interest and costs payable in respect of those charges and
may by order exercise any power in relation to the payment
of those charges which a Magistrates' Court may exercise ...
The repetition of an appeal in (3) and against a certified assessment in
(2), (3) and (4) is unnecessary and forces the readers to study many
superfluous words to reach the main message. Needless repetition
conflicts with everyday use of language in which sentences regularly
imply obvious material from previous sentences. It also runs counter to
the principle of interpretation established by courts that an Act should
be read as a coherent whole. It follows from this that a subsection should
be read in the light of a previous related subsection.

4. See section 74 of the Planning and Environment Act 1987.

Objections to applicationsfor permits
74 ( 1 ) Any person who may be affected by the grant of the permit may object to the grant of a
permit.
(2) An objection must be made to the responsible authority in writing stating the reasons for the
objection.
(3) If a number of persons make one objection, they must give the responsible authority the
name and address of the person to whom the responsible authority is to give notice of the
decision.
Paragraphs and subparagraphs5

50 Sections and subsections may be divided into paragraphs and

subparagraphs. Again, the purpose is to help the reader by providing a
visual aid to comprehension. Provisions can cover items which are
parallel to each other. If the items are presented in separate paragraphs
this displays parallelism both structurally and visually. Compare versions
(A) and (B):
(A) A company must not make a loan to a director, a
spouse of the director, a relative of the director or
spouse, a corporation that is a subsidiary of the
company, or a trustee of a trust that has a beneficial
interest.
(B) A company must not make a loan to-
i) a director, a spouse of the director, or a relative of
the director or spouse; or
ii) a corporation that is a subsidiary of the company;
or
iii) a trustee of a trust that has a beneficial interest.
There is no difference in content nor in the order of material in these
two versions. The material has simply been set out differently so that
the parallel items stand out in (B). The reader can note each item before
proceeding to the next.
51 However paragraphing should not be used unthinkingly. Too many
paragraphs or subparagraphs may defeat the intended purpose by
overloading readers with too much material. For instance, if a sentence
runs to eight or more paragraphs, by the time that readers read paragraph
(h), they may have forgotten paragraphs (a) and (b). If the paragraphs
are written in plain English, the problem arises from limits on the short-
term memory, not from any difficulty in the language. It is the
accumulation of the paragraphs that leads to lapses in short-term
memory. The paragraphing helps readers to retrieve the introductory
words easily if they start to forget them, but it is better to group the
material differently and spread it over two or more subsections.
52 Paragraphs and subparagraphs are only part of a sentence. Any that
belong to a series must be preceded by general words that are applicable
to all of them and that make their grammatical structure complete, for
example:
73 (1) A referral authority must consider every application
referred to it and may tell the responsible authority in writing
that-
(a) it does not object to the granting of the permit; or
(b) it does not object if the permit is subject to the
conditions specified by the referral authority; or

5. The meaning of paragraph in legislative drafting is different from its ordinary meaning and
clashes with the principle stated by many drafting experts that words generally should not be
used in Acts outside their ordinary meaning.
 (c) it objects to the granting of the permit on any specified
ground.
Planning and Environment Act 1987
53 Paragraphing to avoid ambiguity. Paragraphing is a useful device for
avoiding ambiguity. Consider the following section of the Motor Car
Act 1909 (Vic) (now repealed):
10 (1) If any person drives a motor car on a public highway
recklessly or negligently or at a speed or in a manner which
is dangerous to the public having regard t t ~all the
circumstances of the case including the nature condition and
use of the highway and to the amount of traffic which actually
is at the time or which might reasonably be expected to be on
the highway shall be guilty of an offence against this Act.
In Chammen v Gilmore6 it was held that the words in italics modified
all of the four preceding expressions, recklessly, negligently, at a speed
and in a manner; in Kane v Dureau7 they were treated as not applying
to re~klessly.~The matter could be put beyond doubt by the following
arrangements:
(A) [In order to make the words having regard to ... highway
applicable to each of the four expressions]:
If a person drives a motor car on a public highway-
recklessly, or
negligently, or
at a speed or in a manner which is dangerous to the public,
having regard to all the circumstances of the case, including
the nature condition and use of the highway and to the
amount of traffic which is actually at the time or which
might reasonably be expecied to be on the highway, he shall
be guilty, etc.
(B) [In order to make the words apply only to the last two of
the expressions]:
If a person drives a motor car on a public highway-
recklessly, or
negligently, or
at a speed or in a manner which is dangerous to the public
having regard in either case to all the circumstances ...
highway,
he shall be guilty, etc.
54 Conjunctions between paragraphs. If the provisions in a set of paragraphs
or subparagraphs are to be taken cumulatively, and is inserted between
each paragraph or subparagraph, for example:
(4) Before making an enforcement order under this
section,the Planning Appeals Board must consider-

6 . [1914j VLR 455.

7 . [I91 11 VLR 293.
8. This example of different judicial interpretations of the section is cited by E.L. Piesse, The
Elements ofDrafiing, 7th ed, Law Book Co, Sydney 1987,23,24.
 (a) whether the application for the enforcement order
should be made to the responsible authority under
section 130, in the case of an application under sub-
section (1); and
(b) what the effect of not making the enforcement order
would be; and
(c) whether the applicant should give any undertaking
as to damages; and
(d) whether it should hear any other person before the
enforcement order is made.
Planning and Environment Act 1987

If only one of the provisions is likely to apply in a particular case, or is

inserted between each paragraph or subparagraph, for example:
1) If there is a proposal, or the directors of a target company
have reason to believe that there is a proposal, to make offers
or if offers that have been made have not been accepted-
a) a person who proposes to make or has made the
offers; or
b) an associate of such a person; or
c) the target company; or
d) an associate of the target company or of an officer of
the target company; or
e) if the person or an associate mentioned in (a), (b) or
(d) is a corporation, an officer of that corporation or
a person associated with such an officer,
must not make a profit forecast to the public or to a member
of the target company (except a statement made solely to
the target company's officers or advisers).
(Plain English Version, Companies (Acquisition of Shares)
(Victoria) Code)
Convention has approved the insertion of and or or only after penultimate
paragraphs. However experience and research with general readers
have shown that this can lead to misinterpretation, with readers applying
or especially only to the last two paragraph^.^

55 There are occasions when neither and nor or is correct, and the
paragraphs or subparagraphs are presented as a simple list with no
linking conjunction, for example:
6 (2) ...a planning scheme may-
(a) set out policies and specific objectives;
(b) regulate or prohibit the use or development of any
land;
(c) designate land as being reserved for public purposes;

9. For a supporting comment see G.C. Thornton, Legal Drafing, 2nd ed, Butterwonhs, London,
1979,81-82. The discussion is omitted in the 3rd ed (1987).

26
 @ provide for any other matter which this Act refers to
as being included in a planning scheme.
Planning and Environment Act 1987
T h e intention here is to allow a planning scheme to contain any or all
of the matters set out in paragraphs (a) to @. Inserting and after each
paragraph could imply that a scheme had to contain all of the matters.
On the other hand, the insertion of or after each paragraph could imply
that a planning scheme could cover only one of the matters. If there is
any possibility of misunderstanding with a series of paragraphs such as
this, the series can be introduced with such words as any of the following,
for example:
2) The responsible authority may serve the enforcement
order personally or by registered post on one or more of the
following persons-
a) the owner of the land
b) the occupier of the land
c) any other person who has an interest in the land.
56 It might be best to adopt a clear practice with respect to conjunctions in
order to avoid the risk of misunderstanding. The following is one
suggestion:
and means that all the paragraphs apply together
or means that only one of them applies
a the omission of a conjunction means that the paragraphs
represent a series of options, any or all of which may
auulv.
57 Labelling of paragraphs and subparagraphs. Paragraphs are indented
and labelled with lower case letters with brackets to the right: a) ,b) ,c)
etc. If a section or subsection is divided twice into paragraphs, the
lettering of the second set follows on consecutively from the letters of
the first set, for example:
2. T h e taxation by a State, in common with other salaries
earned within the State, of-
(a) the official salaries of officers of the Commonwealth
residing in the State after the commencement of this
Act; and
(6) the allowances and salaries, paid after the
commencement of this Act, of Members of the
Parliament ...
shall not ... be deemed-
(c) to be an interference with the exercise of any power of
the Commonwealth, or
(d) to be inconsistent with any Act by or in pursuance of
which the salary is fixed or made payable.
Commonwealth Salaries Act 1907 (Cth)
Because the labelling here can mislead readers into regarding (c) and
(d) as parallel with (a) and (b), the division of a section or subsection
twice into paragraphs should be avoided as far as possible and other
ways should be explored for presenting the provision. Subparagraphs
 are indented and numbered with small Roman numerals with a right
hand bracket: i),ii),iii) etc.

Sub-subparagraphs

58 Subparagraphs should be divided only in very exceptional circumstances.

Generally a division into subparagraphs indicates a complicated
approach to the material and it should be reconsidered and preferably
redrafted. There are occasions, however, when sub-subparagraphs are
legitimate because the details belong together. If that is the case, the
sub-subparagraphs are indented and labelled with a capital letter in
brackets: (A), (B), (C) etc.

Schedules

59 Schedules are similar in function to appendixes in other documents.

They allow secondary matters to be removed from the main body of an
Act so that the general principles and main issues can be more readily
understood. Schedules may provide for matters such as the appointment
of members to a statutory body;1° plans, maps, or descriptions of areas;
the wording of agreements; methods of calculating taxes; repeals and
amendments. Schedules can be divided into segments which are
generally referred to as clauses, subclauses, paragraphs and
subparagraphs. These segments parallel the segments of sections,
subsections, paragraphs and subparagraphs in the body of an Act.

Explanatory footnotes

60 Footnotes or marginal notes are already used in Acts to give technical

details, for example, the numbers of amending Acts. Their use may be
extended to matters related to content in much the same way as footnotes
are used in general publications. For example, if it is necessary to make
a cross-reference in an Act, a brief summary of the material in the cross-
reference may be given in the footnote: Part 5 of the XYZ Act sets out
the function of the Board. This practice can be particularly helpful if the
cross-reference is to another Act which is not immediately available, or
to a matter which is not central to the readers' present concern. Readers
can be given some information about the other provision which may be
sufficient for their purpose and avoid the need to consult the other
document. Footnotes may also be used to answer common questions.
Clause 55 (1) of the Residential Tenancies Bill 1985 stated:

10. See, for example, Schedule 1 and 2 to the Guardianship and Administrative Board Act 1986
which contains routine details of the members and procedures of the Board.
 A landlord has a right to refuse to allow a tenant to keep a
pet on the rented premises, but must not refuse unreasonably.
A footnote to this subsection adds:
A guide dog for a blind person is not a pet under the Equal
Opportunity Act 1984.
Footnotes may contain brief definitions of technical words, or references
to other relevant material in the Act, its Schedules or elsewhere.
Although such explanatory footnotes may seem unusual and
unconventional, if properly used they may increase the readability of
Acts, particularly as reference documents. Other examples of explanatory
footnotes are the footnotes to sections 3 (1) and 52 (1) of the Road Safety
Act 1986 and section 7 (3) of the Retail Tenancies Act 1986 and the
endnote to the Corrections Act 1986.

Index

61 Acts may be read from beginning to end once or twice, but thereafter
readers regard them as reference works to which they return to check
on one item or another. This calls for mechanisms to help readers locate
information. Long Acts in particular present problems of access. A table
of contents offers only limited help. An index offers a more extensive
listing of subjects and because its entries are listed alphabetically it can
be a more speedy source of reference. Indexes then should be a regular
feature especially of long Acts. An index need not be confined to words
used in an Act. It may include commonly used alternative words. This
helps readers who approach the Act with a different set of technical or
colloquial terms from those used in the Act. By using the index, they
can readily locate relevant provisions, including definitions, even if they
use a different reference term."

Part 3: Special Problems in Organisation

Cross-references

62 Strict restraint should be exercised with cross-references. They may

distract the reader and make the text difficult to read, for example
subsection 107 (4) of the Credit Act 1984:
107 (4) The notice referred to in paragraph (d) of sub-
section (1) or paragraph (b) of sub-section (2) is complied
with if within the period of one month after service of the

1 1 . The use of computers in preparing an index is discussed in paragraph 117.

 notice (or where a longer period is specified in the notice,
that longer period) the default is remedied (except as referred
to in sub-paragraph (9 of paragraph (6) of sub-section (3)),
the amounts referred to in sub-paragraph (ii) of paragraph
(b) of sub-section (3) have been paid or tendered and the
enforcement expenses referred to in sub-paragraph (iii) of
paragraph (b) of sub-section (3) (if any) have been paid.
Here in the space of nine lines the reader is confronted with five cross-
references. The construction may have been unnecessary as the message
appears to be implied in subsection (3). If it was essential to make the
point explicit, a general statement would have been sufficient:
A debtor complies with the notice if he or she meets its
requirements within the specified time.
If a lot of cross-referencing seems necessary in an Act, it may indicate a
fault in its organisation. Drafters should not have to refer readers back
and forth but should lead them through the material in a steady
progression.
Global cross-references should be particularly avoided, for example:
21 (1) Subject to any other provision made in this Act or in
any other enactment with respect to the constitution of the
Tribunal ...
Administrative Appeals Tribunal Act 1984
Global cross-references place an unfair burden on readers. They require
readers to find the relevant reference themselves and leave them with
the constant fear that they might have missed a provision. Drafters
should indicate whether provisions apply or not.
Cross-references to provisions in other Acts may be tiresome if readers
do not have those Acts to refer to. Explanatory footnotes may be used
to provide some idea of the content of the cross-reference. Even within
an Act, a cross-reference by number alone can be irritating, especially
if the reference is not pertinent. The practice followed in some United
Kingdom Acts of including the heading after the cross-reference number
is recommended, for example:
103 (7) ... sanctioned in accordance with section 425
(company compromise with creditors and members) or
section 582 (liquidator in winding up accepting shares as
consideration for sale of company property) ...
Companies Act 1985 (U.K.)
References should be specific rather than general. A cross-reference to
another provision by its number (for example 5 (2) a)) cannot be
misconstrued and is easy to find. Relative descriptive labels such as
preceding, previous, and following (for example the preceding section) are
less precise for readers. Moreover, they create confusion if an additional
section is inserted later.
The forward method of cross-referencing should be used, that is 5 1) a)
rather than paragraph a) of subsection 1) of section 5. Practice varies
over which descriptive label should be used-the name of the section
 or the name of the paragraph, for example section 5 1) a) or paragraph
5 1) a). The Commonwealth practice of referring to the lowest
subdivision down the scale is preferred, for example subsection 10 9) or
paragraph 6 2) 6). This means that the cross-reference specifies the
precise segment to which readers are directed. An even simpler form
would omit the descriptive label altogether, for example the rules in 5
I) a) require.
67 It is not necessary to include the words of this Act, Part, or section in
cross-references to items in the same Act, Part or section (section 19,
Interpretation of Legislation Act 1984). One may refer to Part 3 (not
Part 3 of this Act); Division 4 (not Division 4 of this Part); and subsection
I) (not subsection I) of this section). However, if a reference includes a
section of the same Act and a section of another Act, to avoid confusion
it is necessary to write, for example, section 3 of this Act and Part 3 of the
Audit Act 1958.

Special circumstances

68 Special circumstances are often treated erroneously as exceptions. This

forces drafters into a type of cross-reference, for example:
1) This Act, except sections 4 and 6, begins on 1 January
1988.
2) Section 4 begins on 1 March 1988.
3) Section 6 begins on 1 July 1988.
This approach forces readers to hold sections 4 and 6 in suspense while
they absorb the rest of 1). Only then can they have the situation with
sections 4 and 6 resolved. Consequently their attention is divided. It is
better to reorganise the information so that the special circumstances
are dealt with before the general provision, for example:
1) Section 4 begins on 1 March 1988.
2) Section 6 begins on 1 July 1988.
3) T h e rest of the Act begins on 1 January 1988.
This arrangement allows the material to flow naturally. It does not
introduce an item only to have to reintroduce it later; readers can finish
with it before they have to deal with any other items. A similar approach
needs to be adopted when it is desired to exclude some activities from
the effects of a repeal. A common approach is to introduce the repeal
and then to countermand its effect in part through a subsection
introduced by notwithstanding, as occurs in subsection 8 (3) of the Water
and Sewerage Authorities (Financial) Act 1985:
8 (3) Notwithstanding the repeal by sub-section (1) of
section 71 of the Principal Act where, immediately before
the commencement of this section, a Sewerage Authority
within the meaning of the Principal Act has as a term or
condition of the issue of a debenture or mortgage under that
 Act provided a sinking fund in respect of that debenture or
mortgage, the Sewerage Authority shall continue to provide
a sinking fund in respect of that debenture or mortgage
during its currency as if section 71 of the Principal Act had
not been repealed.
T o avoid frustrating readers and asking them to live out a fiction as if
the section had not been repealed, it is better to reorganise the material
along some such lines as:
1. A Sewerage Authority must continue any sinking fund
for a debenture or mortgage in existence immediately
before the beginning of this Act under the same
conditions as applied to it under section 71 of the
Sewerage Districts Act 1958.
2. Section 71 of the Sewerage Districts Act 1958 is repealed.

If approaches similar to this are adopted readers are saved from having
to go through the steps of cancelling an item in their minds only to find
that they then have to cancel the cancellation. It means organising
material so that there is a logical flow of ideas without backtracking.
 CHAPTER 5.

GRAMMATICAL STRUCTURE

69 Convoluted and awkward grammatical structure is a far greater

hindrance to readability than the occasional occurrence of a technical
word. Again, there are structures which are difficult only for some
readers but for which equally acceptable alternatives are available. This
chapter examines aspects of grammatical structure which are a recurring
source of difficulty in Acts. It explains the principles that should be
followed to avoid difficulties.

Length and complexity of sentences

70 Every authority on legislative drafting condemns long and complicated

sentences even if they are accurate and grammatical. Readers' short-
term memory cannot handle large stretches of material. The volume of
detail obscures the central message. The longer a sentence is, the greater
the danger that details will be overlooked or a connection missed.
71 Some writing manuals propose an average length of 20-25 words for
sentences in a text. Some sentences would of course be longer, and
others shorter, but this average may be taken as a guide. If writers find
that they are exceeding this limit, especially when the material is
complicated, then they should check their sentences. The structure
may be unduly complex. It is this complexity rather than the length of
the sentence which leads to incomprehensibility, for example, subsection
27 (12) of the Companies (Acquisition of Shares) (Victoria) Code:
Where an offeree who has accepted a take-over offer that is
subject to a prescribed condition receives a copy of a notice
under sub-section (10) in relation to a variation of offers
under the relevant take-over scheme, being a variation the
effect of which is to postpone for a period exceeding one
month the time when the offeror's obligations under the
take-over scheme are to be satisfied, the offeree may, by
notice in writing given to the offeror within one month after
receipt of the first-mentioned notice and accompanied by
any consideration that has been received by the offeree
(together with any necessary documents of transfer),
 withdraw his acceptance of the offer and; where such a
notice is given by the offeree to the offeror and is
accompanied by any such consideration and any necessary
documents of transfer, the offeror shall return to the offeree
within 14 days after receipt of the notice, any documents
that were sent by the offeree to the offeror with the
acceptance of the offer.

This sentence contains 174 words. But the excessive complexity of the
sentence comes not simply from its length but mainly from the
compression of too many ideas and qualifications into the one sentence.
It begins with a conditional clause in which the subject is modified by a
relative clause. The flow is interrupted again while the subject is modified
by a relative clause, which contains another relative clause modifying
an item in it, and which in turn has another relative clause built into it.
It is only after all this that readers come to the main clause, to be
confronted with another round of entangled interruptions to the main
idea, including a parenthetical phrase. This structure forces readers to
break up the sentence into smaller components so that they can assimilate
it. The sentence should have been divided into more manageable parts,
as is provided for in the plain English version of subsection 27 (12):
1) If an offeree who has accepted an offer that is subject to
a defeating condition receives under subsection 21(1) a
copy of a notice of a variation that would postpone the
fulfilment of the offeror's obligations for a period
exceeding one month, the offeree may withdraw his or
kt acceptance by-
a) giving the offeror written notice of the withdrawal
within one month after receiving the notice; and
b) returning any consideration received by the offeree,
together with any necessary documents of transfer.
2) Within 14 days after receiving the offeree's notice, the
offeror must return any document that the offeree sent
with the acceptance of the offer.

Each sentence introduces a new piece of information which readers

may note before proceeding to the next.
72 Far from being the products of haste or lack of time, many long sentences
are the result of the greater amount of time available in writing to
reflect, to elaborate and to revise. This is one of the reasons that writing
is different from speech. But it may present hazards for writers. They
may be led to integrate more information into each sentence especially
in view of the conviction that each section of an Act should contain
only one sentence.' The ultimate result is often that readers are presented
with language which is different from the type they are familiar with in
speech and which is therefore more demanding. While writing is not
the same as speech, drafters of Acts should aim to keep written forms as

1 . This is no longer necessary, see paragraph 46.

34
 close as possible to speech. Above all, their approach to sentences should
be to keep discrete items of information apart. They should use the
many devices that are available to link sentence to sentence-and hence
idea to idea-rather than compressing all the ideas into one sentence.
The use of short sentences does not require that they be limited to one
clause. An unrelieved series of such sentences is tedious to read. Also,
extra clauses are usually necessary to show the interrelationships between
ideas. What is reqilired is that sentences should be as brief as possible
and well constructed.

Order of clauses within a sentence

73 A conditional clause presents readers with a task of reasoning, and the

use of more than one conditional clause at the beginning of a sentence
should be avoided. If, however, there are a number of conditional
clauses linked together that require a complex chain of reasoning, as
paragraph 25 (3) (d) of the Credit Act 1984 demonstrates:

Where, by reason of sub-section (I), a tied loan contract is

discharged when a contract of sale is rescinded or
discharged-

...
and, where the contract of sale is a contract of sale of
goods or services-
(d)if the goods are in the possession of the buyer-
(i) where, before the rescission or discharge of the contract
of sale, there was not a mortgage relating to the tied loan
contract, the buyer shall deliver the goods to the supplier; ...

Contributing to the difficulty in applying the conditionals here is their

arrangement at the beginning. Readers have no context in which to
interpret them until they reach the main clause at the end of the
sentence. This is no problem for the drafters because they already know
the solution before they write. The arrangement may also be satisfactory
for lawyers who are familiar with it from experience. But it does not
seem so well-suited for general readers. It is better for them if drafters
put the main clause first and if they break up a series of conditionals. As
Thornton2 recognised, this often allows the conditions to be set out in a
series of paragraphs which helps readers negotiate the various steps in
reasoning that they have to take. If there is only one conditional clause
and it fits in with the structure of the discourse, it may be stated first
without causing any problems for readers.

2. G.C. Thornton, Legal Drafting, 3rd ed, Butterworths, London, 1987,62.

Order of sentence components

74 The structural components of a sentence in the form of a statement are

subject, verb, complement (including the object) and adverbial, for
example:

The chased the yesterday

boy cat

The subject and verb, or subject, verb and complement are essential
components of a sentence and should be kept together.
75 Do not separate the auxiliary and the main verb. In speech, and in most
writing, the auxiliary and the main verb are kept together. This is often
not the case in legislative drafting where readers ,may be confronted
with unexpected separations of these components. For example, section
74 (1) of the Credit Act 1984 interposes 107 words, including three
paragraphs, between the auxiliary and the main verb:
Where a debtor by reason of illness unemployment or other
reasonable cause is unable reasonably to discharge his
obligations under a regulated contract, the debtor may, where
he reasonably expects that he would be able to discharge his
obligations-
(a) if the period of the contract were extended and the
amount of each payment due under the contract
accordingly reduced (without a change being made
to the annual percentage rate);
(b) if the dates on which payments due under the contract
during a specified period were postponed (without a
change being made to the annual percentage rate);
or
(c) if the period of the contract were extended and the
dates on which payments due under the contract
during a specified period were postponed (without a
change being made to the annual percentage rate) ...
apply to the credit provider for a variation of the contract.
There is no advantage to be gained from this arrangement. Readers
cannot be expected to retain the auxiliary in short-term memory across
a gap of 200 or more words. By the time they reach the main verb,
apply, they may have forgotten the auxiliary and would need to look for
it again to make sense of the verb group. Alternatively, having passed
the auxiliary they may not concentrate fully on the adverbial because
they may be looking for the main verb to complete the verb structure.
This difficulty could be avoided by placing the words apply to the credit
provider for a variation of the contract immediately after the auxiliary,
may.
76 Do not separate the subject and the verb. Similarly, the subject and verb
should not be separated by lengthy relative clauses. For example, section
226 of the Accident Compensation Act 1985 reads:
 (1) Any person who-
(a) fails or neglects duly to furnish any return or
information or to comply with any requirement of
the Commission as and when required by this Part
or the regulations, or by the Commission;
(b) without just cause refuses or neglects duly to attend
and give evidence when required by the Commission
or any person employed in the administration of this
Part and duly authorised by the Commission, or to
answer truly and fully any questions or to produce
any books or papers required by the Commission or
any such person to be produced by that person;
(c) makes a statement of remuneration in response to a
request under section 200 that is false in any
particular;
(d) makes or delivers a return which is false in any
particular or makes a false answer whether orally or
in writing; or
(e) contravenes any provision of this Part for the
contravention of which no penalty is expressly
provided-
shall be guilty of an offence.
There is too large a gap in this provision between the subject any person
and the verb shall be. Select instead alternative structures that avoid this
difficulty, for example, A person is guilty of an offence ifthat person ... or
A person is guilty of an offence who ... Both of these forms keep the
subject next to its verb which promotes comprehension.
77 The adverbial. Misplacement of the adverbial weakens the emphasis
that it should receive. Adverbials carry an important part of the message
and in most cases should come towards the end of their clauses so that
they receive the normal end stress which is associated with the final
position in English sentences. For example, in section 12 (1) of the
Fundraising Appeals Act 1984, the adverbial is placed between the
auxiliary and the verb and so loses the impact it would have if it were
placed at the end of its clause.
T h e subsection reads:
Subject to this Act, a person who has given notice pursuant
to section 11 and who has not within 21 days of giving that
notice received from the Minister a direction as provided for in
...
section 14 may conduct a fundraising appeal (emphasis
added).

The italicised words should be rearranged:

who has not received a direction from the Minister as
provided for in section 14 within 21 days of giving that
notice ...
Active or passive voice

78 Legislation often confers a power or imposes an obligation on a person

and if the reduced form of the passive voice is used it does not specify
who is to have the power or obligation, for example, A copy shall be
given to the woman; who is to give the copy? Similarly section 4 4 of~ the
Superannuation Act 195g3reads:
If any refund or benefit payable to a person under this Act is
not paid within 2 months of the person becoming eligible
for the refund or benefit, the Board must pay to that person,
in addition to the refund or benefit, interest (emphasis...
added).
It is not clear who is responsible for the original payment. The mention
of the Board in the second clause does not resolve the uncertainty. Its
omission from the first clause could suggest that it was being appointed
to salvage the situation. The active voice, on the other hand, clearly
indicates who is to have a duty or obligation, for example The doctor
(hospital, etc) must give a copy to the woman; The employer (Board, etc)
must pay any refund. In these situations the active voice is more precise
than the reduced passive because it identifies all the parties involved
explicitly.
79 Although the full version of the passive voice (for example Any
declaration may be revoked by the Treasurer) includes the agent and
therefore indicates the agent's responsibilities, it is often less satisfactory
than the active. The passive uses more words and reverses the expected
order in which the agent occupies the subject position. It may lead to a
confusing series of reversals:
4 (3) If an employer has after the appointed day and before
the commencement day made a payment which should have
been by reason of the coming into operation of this section,
made by the Board out of the Fund and which would have
been authorized by this Act to have been made from that
Fund the employer is entitled to be reimbursed from that
Fund the amount of that payment.
Construction Industry Long Service Leave (Amendment)
Act 1985
Only once in this sentence does the agent appear in the subject position
before the action; on the four other occasions it occurs after the verb.
80 Use of the passive may also lead to uncommon expressions, for example,
for subsection (1) there shall be substituted ... ; after the expression
"subsection (5)" (where respectively occurring) there shall be
inserted ... The structure there shall is unusual in general writing. It
should not be used in Acts. The active imperative is clearer, for example,
for subsection (1) substitute ... ;and after "subsection (5)" insert ...
81 There are many occasions, however, in which the passive is the proper
voice to use, for example where the agent is unimportant or universal

3. Inserted by section 5 (zy) of the Superannuation Schemes Amendment Act 1985.

38
 and therefore does not have to be specified. The Infertility (Medical
Procedures) Act 1984 has two clear illustrations:
1. This Act may be cited as the Infertility (Medical
Procedures) Act 1984.
10 (3)A procedure to which this section applies shall not be
carried out unless ...
Also the passive may assist in allowing writers to arrange their material
so that known and old information occurs in the subject position and
unknown or new information occurs in the final position where it can
receive end stress. At the same time it may promote a smooth transition
from one sentence to the next, for example:
5 ( d ) ... The Minister may ... cancel the approval of the
hospital ...
(6) Where the approval of a scheduled hospital ... is cancelled
under this section, the Minister ...
Infertility (Medical Procedures) Act 1984
In subsection (6) the passive allows the approval to be shifted to the
subject position so that it establishes an immediate link with subsection
(5).
82 The use of the active or the passive voice depends on the aspect of the
message that is important both informationally and contextually. The
principle for legal and official writing is not never use the passive but
rather do not use it excessively. Above all, writers should avoid it in those
contexts in which it creates vagueness and imprecision.

Nouns from verbs

83 Using nouns derived from verbs tends to rob an event of its sense of
action and to introduce a degree of abstractness and detachment. It is
preferable to retain the verb-to write to apply not to make an application;
to consider not to give consideration and to conclude not to reach a
conclusion. The single verb is shorter and more precise, especially when
used in the active voice, for example unless the buyer has asked the
supplier in writing to satisfy the judgment is clearer and more direct than
unless a written demand has been made on the supplier for satisfaction of
the judgment. Similarly, ifthe objector does not appear before the Tribunal
is clearer than in default of the appearance of the objector before the
Tribunal. It also expresses the conditional nature of the action more
explicitly.

Positive or negative

84 When an idea can be expressed either positively or negatively, it should

be expressed positively. Using the negative forces people to convert to
 the positive to find out what they can do. Positive statements are therefore
generally easier to understand than negative ones. For example Wait
until the subscriber answers and then insert your money is more quickly
understood than Do not insert your money until the number answers.
Similarly, Indigents with children may ... is better than Indigents other
than those with no children may ...
85 Multiple negatives in particular should be avoided. They force readers
to follow a tangled web, subtracting, and then adding, and then
subtracting again, so that they cannot get the basic information easily,
for example:
49 (1) The Court shall not make an order under section
45, ... if it is satisfied that the order would unfairly prejudice
any person.
Companies (Acquisition of Shares) (Victoria) Code
This could be redrafted A Court may make an order only if it is satisfied.
The construction may ... only is easier to understand than a negative
and unless, particularly for those who do not speak English as their
native language. A structure such as A company must not send out a
notice unless it has the consent of the Commission does not occur in many
languages. It is better expressed A company may send out a statement
only if it has the consent of the Commission.
86 Negatives should of course be used for prohibitions, for example Do not
walk on the grass. This negative form states the prohibition more
effectively and precisely than a positive alternative such as Walk on the
paths.

Cohesion among sentences

87 Because sentences that follow one another are read together, it is not
necessary to repeat material from earlier sentences. For example, sub-
section 112 (1) of the Mental Health Act 1986 outlines the powers of
inspection of a community visitor:
A community visitor is entitled when visiting a mental health
service to-
(a) inspect any part of the premises; and
(b) see any person who is receiving treatment or other
services unless that person has asked not to be seen;
and
(c) make enquiries relating to the admission, detention,
care, treatment and control of patients or residents;
and
(d) inspect any document or medical record relating to
any patient or resident if he or she has given informed
consent in writing and any records required to be
kept by or under this Act.
Subsection 112 (2) then provides that:
 112 (2) Where a community visitor wishes to perform or
exercise or is performing or exercising any power, duty or
function under this Act, the person in charge and every
member of the staff or management of the mental health
service must provide the community visitor with such
reasonable assistance as the community visitor requires to
perform or exercise that power, duty or function effectively.
The opening clause of (2), Where a community visitor ... under this Act,
is unnecessary: its content has already been stated in (1). Because (2)
follows immediately on (1) and is part of the same section, it is obvious
that it relates to (1) and could appear more briefly as:
(2) Members of the mental health service must give any
reasonable help that the community visitor requires to carry
out any of these a~tivities.~
Subsection (2) also ignores internal connections. The last clause virtually
repeats the material in the first clause. Some drafters defend repetition
on the ground that it makes the meaning of the text absolutely certain.
This defence conflicts with a basic rule of interpretation that an Act
should be read as a whole-a rule which drafters expect readers to
observe. Rather than adding to the precision of the text, the excessive
caution detracts from its sharpness.
88 If it is necessary to show the links between certain subsections pointedly,
then there is a set of words available to express the connection, for
example alternatively, however, in addition, instead, moreover, nevertheless
and similarly. There can be no objections to using these words because
one of their class-notwithstanding-is already in constant use in
legislation. The Companies Act 1985 (U.K.) shows what can be done:
103 (4) But sub-section (3) does not exclude the application
of sub-section (1) unless under the arrangement it is open to
all the holders of the shares in the company in question (or,
where the arrangement applies only to shares of a particular
class, to all the holders of shares in that other company,
being holders of shares of that class) to take part in the
arrangement.
In determining whether that is the case, shares held by or
by a nominee of the company proposing to allot the shares
in connection with the arrangement, or by a nominee of a
company which is that company's holding company or
subsidiary or a company which is a subsidiary of its holding
company, shall be disregarded.
(5) Sub-section (1) also does not apply to the allotment of
shares by a company in connection with its proposed merger
with another company; that is, where one of the companies
proposes to acquire all the assets and liabilities of the other

4. It might be argued that this wording is narrower in import than power, duty or function under
this Act of the original. T h e argument does not affect the point being made here, but if the
original (2) is wider in scope, it should not be part of s l l 2 , but should form a separate section.

41
 in exchange for the issue of shares or other securities of that
one to shareholders of the other, with or without any cash
payment to shareholders.
108 (2) However, where it appears to the independent
person (from here on referred to as "the valuer") to be
reasonable for the valuation of the consideration, or part of
it, to be made (or for him to accept such a valuation) by
another person who-
(a) appears to him to have the requisite knowledge and
experience to value the consideration or that part of
it; and
(b) is not an officer or servant of the company or any
other body corporate which is that company's
subsidiary or holding company or a subsidiary of that
company's holding company or a partner or employee
of such an officer or servant,
he may arrange for or accept such a valuation, together with
a report which will enable him to make his own report under
this section and provide the note required by sub-section (6)
below.
T o use these linking devices is to adopt the normal and natural methods
of English.
 CHAPTER 6 .

VOCABULARY

89 There is probably no section of legal language that gives rise to more

extreme and clouded debate than vocabulary. On the one hand, there
are some in the community who condemn the words of the law utterly,
as if the great bulk of them were unnecessary, or intentionally difficult
and obscure, to keep general readers in the dark. On the other hand,
there are some in the legal profession who are equally dogmatic in their
advocacy of legal words, defending all of them as if the fabric of the law
would collapse without them. Part 1 of this chapter looks at some
aspects of legal vocabulary. Part 2 concerns the use of words in amending
legislation. And Part 3 concentrates on the meaning of words and the
practical aspects of definitions.

Part 1: Aspects of Legal Vocabulary

Litigated words

90 Writers should not assume that because a word or phrase has been a
subject of judicial interpretation, they should continue to use it instead
of a simpler, more widely understood alternative. While it is true that
in some cases the substitution of another word may change the meaning
of legislation, that is not always so. Indeed, the fact that the meaning of
a word has been constantly litigated may indicate that its meaning was
not, and perhaps is not yet, clear. Moreover, a court's ruling on the
meaning of a word is limited to a particular context. Its meaning is
judicially settled-if it is settled at all-only for that context. And, in
any event, the meaning of words change, even judicially settled words.
The meaning determined fifty years ago by a court may no longer be
the established usage of the word. For these reasons, writers should
check every uncommon word or phrase for possible alternatives and
should consider expressing the idea in a way which does not require the
use of a litigated word, for example:
41 (4) (i) Where the evidence for the prosecution has, in
the opinion of the Justice or Justices, established a prima
facie case ...
Justices Act 1902 (New South Wales) (emphasis added)
 was rewritten to help 1985 readers as:
Where the Justice or Justices form the opinion referred to
in subsection (2) (b) that the evidence is capable of satisfying a
jury beyond reasonable doubt that the defendant has
committed an indictable offence ...
Schedule 1, Justices (Amendment) Act 1985 (New South
Wales) (emphasis added)
This version sets out more clearly what is required of jurors: there has
been gain rather than loss by the change. The success of many plain
English versions of traditionally worded documents supports substituting
modern day alternatives as a general rule. If necessary, explanatory
notes may be used to indicate the changes from the traditional
terminology.

Terms of art and other technical terms

91 Words that are genuine terms of art or technical terms may be used in
appropriate contexts. They include words such as affidavit, habeas corpus,
hearsay, hereditaments, easement and mandamus. They also include words
which have a particular meaning in a legal context, such as incapacity,
dependant, and tax-free threshold. These words have precise meanings
and there is often no convenient substitute for them in common
language. Explanatory notes or footnotes may be used to help readers
understand them. For example, a recent mortgage form reads:
I waive my right to require the note holder to do certain
things. Those things are: (1) to demand payment of amounts
due (known as "presentment"); (2) to give notice that
amounts due have not been paid (known as "notice of
dishonour"); (3) to obtain an official certificate of non-
payment (known as a "protest").
National Mortgage Association and the Federal House Loan
Mortgage Corporation
92 The use of legal and technical terms calls for delicate decisions and
sound knowledge. Explanation of a concept may not be enough. It may
be equally essential to counteract any misconceptions which members
of the public may have. In a study of default clauses in consumer
contracts, Davis found that many consumers believed that negligent
injury to the collateral could not constitute default if all the instalments
had been paid on time.' As Davis recognises, it is of little use giving a
definition of default which does not also tackle this misconception.
Often the everyday situation does not match the legal situation; for
example, negligence in law may not be the same as what members of
the public understand by negligence.

1. J. Davis. "Protecting Consumers from Overdisclosure and Gobbledygook: An Empirical Look

at the Simplicity of Consumer Credit Contracts" (1977) 63 Virginia Law Rewiew 878, 879.
Ordinary words with a special legal meaning

93 As well as the technical words for which there are no everyday

equivalents, there are also technical legal words which occur in everyday
language with much the same meaning, for example, contract, husband,
mortgage and motor vehicle. The distinction is one of greater specification
or implication rather than conflict or contradiction. In general usage, a
contract is an agreement, or the document containing the agreement;
for lawyers, it includes notions of offer, acceptance and consideration
that are necessary for contractual obligations to be imposed. While
words of this type may have more precision in law than in ordinary
language, they are readily intelligible and there is sufficient common
agreement about their meaning so that there is no need to use substitutes.
94 Some of the words which are shared by both the general language and
legal language do not overlap so closely in meaning. There is still a core
element, but the words have a limited meaning in a legal context, for
example cattle, domicile and good faith (in insurance). It may not be
possible to avoid using such terms because suitable synonyms are not
available, but again drafters may improve the understanding of non-
experts by providing explanatory notes.

Archaic words

95 Archaic words should generally be replaced by more modern words or

entirely omitted. For example, words such as indenture, hereto,
hereinafter, part (of the one part), chattels, situate, execution, instrument,
presents, aforesaid, said and witnesseth, which are frequently used in
legal documents cannot be justified in the late twentieth century. They
are often redundant or imprecise as well as off-putting for readers. For
example, hereby adds nothing in the context I hereby promise or the XYZ
Act is hereby amended. Other words such as aforesaid, hereinafter,
abovementioned, preceding and the same may also be uncertain and
misleading in their reference.
96 Drafters need not fear that legal documents will be unenforceable if
they depart from traditional legal terminology. There is no risk that a
court would rule that rented premises is different from demised premises,
particularly in view of the recent Victorian and Commonwealth
legislation requiring a purposive, rather than a literal, reading of
s t a t ~ t e sThe
. ~ Attorney-General, in his Ministerial Statement of 7 May
1985, took an important step towards ridding legislative language of
archaic forms when he directed that must should replace shall in its
obligatory sense, and where should no longer be used as a synonym of if
to introduce a condition.
97 As well as avoiding archaic words, writers should avoid using words in
an archaic sense. There are a number of words which have archaic

2. s35 Interpretation of Legislation Act 1984 (Vic) and sl5AA Acts Interpretation Act 1901 (Cth).

45
 meanings when they are used in legal documents which are different
from their meaning in general usage, for example action (in court
proceedings) and instrument (for document). As with archaic words,
these archaic senses should be abandoned wherever there are acceptable
equivalents in general usage.

Latin and French words

98 Latin and French words should generally be avoided unless they have
become part of the English language. For example, words such as
adjudicate, appeal, court, exception, indictment, jury, legal, perjury and
verdict are obviously acceptable. Words such as ab initio, corpus delicti,
in re, de novo, in custodia legis, ejusdem generis, chose in action, cy-pres,
mesne and presents (document) should be replaced with English words.
The Commercial Arbitration Act 1984 gives a neat illustration that
Latin and French words do not have to be used. T h e heading to section
22 contains the French amiable compositeur and the Latin ex aequo et
bono, but the drafter correctly abandoned them in the text and expressed
the ideas clearly through general English words:
22 (2) If the parties to an arbitration agreement so agree in
writing, the arbitrator or umpire may determine any question
that arises for determination in the course of proceedings
under the agreement by reference to considerations of
general justice and fairness.
The pity is that the drafter did not use these effective English words in
the heading as well. As this example shows most foreign terms have no
essential role to play.

Doublets and triplets

99 The unnecessary synonyms that are often used in legal language should
be omitted, for example, acknowledge and confess, act and deed, goods and
chattels, in my stead and place, give, devise and bequeath, terms and
conditions, made and signed, cease and desist, fit and proper, keep and
maintain, force and effect, and have and hold. Such tautologies confuse
readers who strain to see a difference between the terms, believing that
the writer would not use two or three words where one would do. Even
lawyers have been misled into trying to find differences in meaning
where none exist, for example in null and void, cease and desist and rest,
residue and remainder, and are afraid to omit one of a set of synonyms.

Overlapping words

100 Similarly, writers should take care when using words which overlap, for
example authorise and direct, due and payable, obtain and consider, extend
 and apply to, and read and construed as. In each of these pairs, the
second term presupposes the first. If officials are directed to carry out a
task, they are authorised by the direction. If a debt is due, it is also
payable. It would be better to use only the second term as the use of
both terms may confuse readers or lead to a limited meaning being
given to each word. This is even more so with a series of related words,
for example:
112 (3) (c) assaults, obstructs, hinders, threatens, intimidates
or attempts to obstruct or intimidate a community visitor ...
Mental Health Act 1986 (emphases added)
Here, the use of five different verbs may lead readers to question whether
they are exclusive. What of thwart, curb, impede, block, delay or frighten?
Are they covered or has the drafter overlooked them? In effect this
practice of drafters is self-defeating. One generic term such as interfere
with, would be more effective in conveying the meaning than a string
of words. By including closely related words like threaten and intimidate,
the drafter encourages readers to look for gaps between the words,
especially when only some of the verbs after attempts are repeated.

Inflated words

101 A simple or common word should generally be used in legal documents

rather than a grander or more unusual word. For example, divide is
better than allocate, tell than appraise, car than automobile, get than come
into possession of, try than endeavour, fair than equitable, end than
qxpiration, if than in the event that, rank than prioritise, send than
transmit, and about than with reference to. Part of the problem for writers
is that many of these inflated words have an established place in the
custom of their organisations. They are used by force of tradition rather
than through any real merit. These words may function satisfactorily in
internal documents but because of their limited local use, they let
writers down seriously in documents which go to wider audiences.

Elegant variation

102 Similarly, there is no need in legal writing to use different words to

refer to the same object or idea in order to avoid the monotony caused
by repeating the same word. Often this may not cause any harm,
especially when the alternatives are equally familiar, for example author-
writer, holiday-vacation, oppose-resist, and frank-candid-honest. However,
in some cases, change simply for the sake of variation, elegant variation,
may confuse readers. They may wonder if the same matter is being
discussed. For this reason, the same word should be used for the same
concept throughout a document. For example, there is no need to
change from person to defendant, in the following section:
 39 (6) In a prosecution of a person for failing to serve a
notice on a securities exchange under this section, it is a
defence if the defendant establishes ...
Companies (Acquisition of Shares) (Victoria) Code
(emphases added)

Part 2: The Use of Words in Amending Legislation

103 Amendments to legislation should be written in plain English even if

the principal Act is not in plain English. Drafters may be concerned
that if they use different words in an amending Act, those words will be
given a different meaning from the words in the original Act. This fear
is unfounded. It arises largely from a confusion between words and
substance and the mistaken belief that an idea can be expressed in only
one way. But provisions can be expressed in various ways without
altering the content. For example, in pairs of tautological words, such
as each and every and order and direct, one word may be omitted.
Similary, same, such, and aforesaid could generally be deleted. It shall be
the duty of and shall may be replaced by must. Punctuation may be
improved. Inserting commas in a series, for example, may improve the
readability of an Act and occasionally remove an ambiguity. If the
principal Act contains confusing or archaic terms, these should not be
repeated in amending legislation. The idea should be paraphrased.

Part 3: The Meaning of Words

Definition section

104 Efficient communication depends on writers using words in the same

way as the rest of the community does. They only create confusion and
hinder communicatiion if they give words unusual meanings. A
definition section should be seen as a last resort, to be used only in an
extreme contingency. It should be kept as short as possible. The primary
goal for drafters is to use words in their ordinary sense so that they do
not need to be defined. If a word is defined in a statute, it suggests that
it is not being used in its ordinary sense. This in turn implies that
readers must continually refer to the definition section to check the
meaning of the word because it is unreasonable to expect them to
memorise an unusual meaning.
105 If a concept is used only once in an Act, writers should avoid coining a
special term for it which needs to be defined; it is better to spell out the
concept. For example, the term substantialperiod is used in the De Facto
Relationships Act 1984 (NSW):
15 (1) A court shall not make an order under this Part
unless it is satisfied ...
(b) that-
(i) both parties were resident within New South Wales
 for a substantial period of their de facto
relationship; or
(ii) ...
(2) For the purposes of sub-section 1 (b) (9, the
parties to an application shall be taken to have
been resident within New South Wales for a
substantial period of their de facto relationship if
they have lived together in the State for a period
equivalent to at least one-third of the duration of
their relationship.
Substantial period is imprecise and so in subsection (2) the drafters have
defined it. This is a wasteful procedure. A much briefer solution is to
omit substantialperiod and to merge (1) (b) (1) and (2):
i) both parties were resident within New South Wales
for at least one-third of their relationship.
This approach is much easier for readers who in the original version
are compelled both to grapple with the concept substantial period and
are left in the dark about its meaning until they have passed through (b)
(ii) to (2).

Functions of definition section

106 Definitions may serve several functions:

a. To confine a word to only part of its range of meanings.
Although the context usually makes it clear which meaning
is intended in a given sentence, there are times when writers
want to confine the use of a term to one segment of its range
of meanings and not to leave the matter to chance, for
example "oil" means any liquid hydrocarbon; "property"
means only personal property. The object of these definitions
is to obtain clarity; it is not to introduce new meanings or to
depart from ordinary usage. A liquid hydrocarbon, for
instance, is an oil, just as personal property is property. In
other cases, the purpose of a definition is to specify that
particular meanings are being used, for example:
a. "employee" means-
(a) in relation to Part 11-a public employee;
(b) in relation to the remainder of this Act-a
person appointed to the Public Service
(including a Chief Executive Officer)
Government Management & Employment
Act 1985 (U.K.)
b. To promote understanding where a usage is only partially
established in the community, for example, in vitro
fertilization, disinflation and joint float. This function offers
a way of handling new words which may not yet appear in
dictionaries.
c. To avoid ambiguity where a word has competing usages, for
example,"bimonthly" means twice a month.

d. To remove uncertainty, for example, "spouse" includes de

facto spouse; "amended" includes "altered"; and "construct"
includes reconstruct, make structural changes. (Note the use
of a comma in the third example, rather than a conjunction,
because it is a list of alternatives. If both elements are
necessary, connect them with and, for example, "trading"
includes buying and selling).

e. To explain technical words, especially legal ones, for example,

information in the sense of laying a charge.

f. To make the document shorter and more readable by using a

shorthand expression, for example, "odd lot" means a parcel
of shares that is less than a marketable parcel. This follows the
frequent practice of using one or two words to replace a
group of words in referring to a concept. This procedure
should only be used if the concept appears several times in
an Act. Otherwise, readers are required to learn a new word
for a concept for no advantage.
Abbreviations, however, should not be introduced into
definition sections, for example, "Comnzission" means the
Accident Compensation Commission established under this Act;
"Court" means Supreme Court. Since the Accident
Compensation Act was concerned with only one
Commission, it is not necessary to clutter the definition
section with this item. Similarly, since Supreme Court is not
much longer than Court, the space saving is not sufficient to
warrant a special definition. The short form (Court) could
be allowed to arise naturally from the context because if the
long form (Supreme Court) occurs several times in the same
section, it can be safely abbreviated on the second or later
occasion without having to list the short form in the
definition section. The same principle applies to long titles
within a section-use the full title in the first reference and
then a short form; the meaning will be clear from the context
without the need for a formal definition. For an abbreviation
to be justified in an Act, it should be so obvious that it would
not need to be listed in the definition section. If it is not
obvious to readers, then the full form should be used.

g. To identify words which have the same referent. While as a

general principle, only one word should be used to refer to
the same concept in an Act, another word or phrase may
occasionally be used to refer to the same concept. For
example, one section of an Act may set out the duties of de
facto partners, another the duties of parties to an application.
In the Act, the terms de facto partners and parties to the
application may refer to the same individuals. It is not that
they have the same meaning, but in the given context they
 are equivalent in their referents. In the past, the following
device has been used to show this overlap: A reference to
'$arties to the application" is a reference to "defacto partners".
The items treated in this way appeared in a separate section
after the definitions. Instead of this form, it is preferable to
rephrase these items as: "parties to the applicationJJrefers to
"de facto partners". Having one of the equivalent words first
rather than the words a reference in this Act to means that
the treatment of the equivalents is similar to the treatment
of words being defined. As a result equivalents can be
incorporated in the appropriate alphabetical order along
with the other items in the definition section. This saves
readers from having to look to at least two separate places,
as happens at present, if they want to check the meaning of
a word. However, before introducing equivalents, writers
should consider whether both terms are essential. In the De
Facto Relationships Act, for example, one may say the
partner who applied for an order and omit entirely parties to
the appli~ation.~

Equivalents and definitions

107 Items are sometimes presented as equivalents when they are really
definitions or explanations of meaning, for example:
5 (10) In this Act, a reference to remuneration does not
include a reference to allowances for travelling or
accommodation paid or payable at a rate in a particular case
or class of cases that does not exceed such rate as is prescribed
in respect of that case or class of cases.
Accident Compensation Act 1985
This provision can be written more briefly and accurately as a definition:
"remuneration" does not include allowances for ... Not only does this
revision identify the item correctly as a definition but it also eliminates
the verbiage of a reference to.

Commonness of definitions

108 Definitions should not give words or concepts strange or novel meanings.
They should indicate the specific aspect of a word's ordinary meaning
that is relevant. This may be one part of its ordinary meaning or an
extended meaning beyond its ordinary meaning. An example of an
extended meaning for a word is "boat" includes motors and sails, but does
not include personal eflects and water-ski equipment. This is an acceptable
definition because motors and sails are things associated with boats and

3. This treatment is more satisfactory from the readers' viewpoint, see paragraph 38.
 may reasonably be regarded as part of at least some boats. T o extend
the meaning in this way does not depart from the usual meaning of the
word boats. The following definition of formal search, however, is not
only an extended form of the general meaning but also an unusual
meaning:
44 (1) A person who wishes to enter or remain in a prison
as a visitor must, if asked, submit to a formal search.
(2)In this section 'fformal search" means a search to detect
the presence of drugs weapons or metal articles carried out
by an electronic or mechanical device.
Corrections Act 1986 (emphasis added)
This idiosyncratic definition is not what readers of subsection (1) would
expect and in any event is not necessary. The two subsections could be
simply amalgamated: A person who wishes to enter or remain in a prison
as a visitor must, ifasked, submit to a search to detect ...

Unnecessary definitions
109 Words and concepts whose meanings are obvious should not be defined,
for example:
5 (1) unsolicited goods means goods sent to a person without
any request made by or on behalf of that person.
Fair Trading Act 1985

Also there is normally no need to define words which have already been
defined in the Interpretation of Legislation Act 1984. Such words should
be defined only if their meaning is crucial to the understanding of the
Act being drafted. The repetition of definitions in an Act clutters it with
unnecessary detail. The definition sections in the Interpretation of
Legislation Act 1984 includes sections 21 (meaning of certain
expressions in Act); 23 (construction of subordinate instruments); 37
(gender and number); 38 (definitions); 39 (parts of speech and
grammatical forms); 44 (time); 45 (may and shall); 46 (references to the
Sovereign); 47 (references to officer in general terms); 48 (references to
officers, localities etc.); 49 (service by post) and 55 (construction of
references to British subjects etc).
Generality of definitions

110 Drafters should endeavour wherever possible to use a definition which

is consistent with the way in which the word is used in other Acts. If
the definition is only suitable in one Act, that may be an indication that
a word is being defined in an unusual way and the definition should be
reconsidered. If a word is used in the same way as it has been defined in
another Act, a deceptively simple solution is to refer to the definition in
that Act, for example:
3 (1) Insolvent under administration has the same meaning
as in section 5 (1) of the Companies (Victoria) Code.
Building Societies Act 1986
 This should not be done. Not only does it force the reader to look
elsewhere, but the other Act may not be immediately accessible. An
exception to this principle is amending legislation where a reference
from an amending Act to the Act being amended is unnecessary, for
example:
4 (5) Board has the same meaning as in the Principal Act.
Employer has the same meaning as in the Principal Act.
Construction Industry Long Service Leave (Amendment)
Act 1985

Consistency in defihition

111 If a word is defined in an Act, the word should be used with only that
meaning. It is confusing for readers to see a word which has been
defined iri a particular way used in a different sense. Similarly, parts of
speech which are related to the defined word should be used consistently.
If a noun is defined with a particular meaning, its related verb should
be used with the same meaning. For example, if associate (the noun) is
defined i$ a particular way, the corresponding verb associate (with) and
its past participle associated (with) should be used in the same sense.
This of course agrees with general linguistic principles since a look is
I
an act of looking; knowledge is what one knows; (to) contact is (to) make
contact with. But subsection 7 (4) of the Companies (Acquisition of
Shares) (Victorih) Code, defines associate in one way and subsection 7
(5) defines a person who is associated with another person in a different
way. This may confuse readers who are likely to treat associate and
associated with alike.

No substantive material in definitions

112 Definitions should contain only an explanation of the meaning or use

of terms. They should not contain substantive material. For example,
readers of the Building Societies Act 1986 would not expect to find
details of the appointment of directors in the definition section:
3 (4) The composition of a corporation's board of directors
is controlled by a building society or company if the building
society or company can appoint or remove all or a majority
of the directors by the exercise of a power exercisable whether
with or without the consent or concurrence of any other
person.
(5) For the purposes of sub-section (4), a building society or
company is deemed to have power to make an appointment
of directors if-
(a) a person cannot be appointed as a director without
the exercise of such a power by the building society
or company in that person's favour; or
(b) a person's appointment as a director follows
necessarily from the person being a director or other
officer of that building society or company.
 (6) Sub-section (4) does not limit by implication the
circumstances in which the composition of a corporation's
board of directors is to be taken to be controlled by a building
society or company.

Drafting definitions
113 The analytical approach is generally used in drafting definitions. That
is, a meaning of the word is divided into its separate components of
general class, sub-class, and distinctive features of the sub-class. A
definition of kookaburra could appear in the form of:
kookaburra bird of the kingfisher family with
cackling cry, found in Australia.
This definition consists of these components:
general class: a bird
sub-class: kingfisher family
distinctive features: cackling cry, found in Australia.
While this approach distinguishes the creature from all other birds and
from all other objects, it also enables us to see its relationship with other
types of birds and creatures.
114 A second approach to definitions is to illustrate the meaning of a word
by listing some of the items to which it refers. For example, "books"
includes any register or other record of information; "send" includes
dispatch, forward, post. The defined word is intended to have the full
range of its normal meanings. The items are listed to ensure that readers
understand that they are definitely included. All possible items are not
listed. In fact, the list should contain the minimum number of items so
that it does not appear an exhaustive explanation of the meaning of the
word.
115 Occasionally the two approaches are combined: X means Y, and includes
Z . This type of definition is used if there is uncertainty about whether
Z is included. It says clearly that it is included. The following wording
allows all the words requiring special attention to appear in one
alphabetical list for the convenience of readers:
a means b.
a includes c, d.
a means b, and includes c, d, e.
a refers to b.
a is a short form for b.
a has the same meaning as in section 000 of the XYZ Act.
116 Sometimes a definition includes the phrase in relation to-to indicate
that the word is to have a specific meaning in a particular case or
context. For example, "owner", in relation to land, means the person for
the time being entitled to receive the rent of the land. This method must
be used cautiously. It may imply that outside a particular context or
case, the word is being used in its ordinary sense in the Act. If it has
been used elsewhere to convey those wider senses, then it may not be
the most appropriate word to use in the nominated context.
Using the computer to prepare definitions

117 Programs are available to enable a computer to produce either an

alphabetical list of every word in the text, or a concordance which sets
out every occurrence of a given word with some surrounding context.
A concordance may be produced at any time after a draft has been
entered into a word processor. It should be prepared at least on a final
draft. This is the most efficient stage to draw up a complete definition
section. The concordance enables writers to produce exact and complete
definitions economically and without tedium. Writers should check that
they have included every word that might cause readers difficulty and
that all the material included is relevant. For example, if a definition
contains the word includes, it is counterproductive to add to the list
items which are not affected by the provision. T h e list should only be as
full as necessary. The concordance also shows the various uses of a word
and whether the word has been used in more than one sense. If that
occurs,the word should be replaced where necessary so that it is used in
only one sense in the text.

Where to put definitions

118 The present system is to place definitions at the beginning of an Act.

This gives readers early warning of any special ways in which terms are
used in the Act. But, on the other hand, it may provide them with a
hurdle before they reach the main provisions of the Act. Generally, the
principal substantive matters in an Act should come first and less
important or procedural matters later. It would therefore be better to
put the definition section at the end of the Act-see Appendix 2. This
could be done quite conveniently if defined words were identified
typographically (for example, by italics or bold type)4 to warn readers
that they sould check the definitions of those words. A footnote should
then refer the reader to the section in which the word is defined. This
saves readers from continually turning to the definition section at the
front or the back of the Act. But if words are defined in a Part or
Division, there should not also be a definition section in the Act. Readers
should know that definitions are either in the definition section or in
the body of the Act; they should not need to check both positions.

4. It is not necessary to use two devices, for example, bold type and quotation marks, as in section
5 of the Professional Boxing Control Act 1985: "Adult means aperson". One device is sufficient.

55
 CHAPTER 7.

USAGE OF CERTAIN WORDS

119 This chapter concerns the usage of certain words in legislation which
may give rise to dispute, especially in the context of introducing plain
English. The Style Manual produced by the Australian Government
Publishing Service,' which is followed by the Victorian Government
Printer, should be consulted on routine matters.

120 The meaning of and and or appears straightforward. And is seen as

conjunctive, cumulative, adding items together, for example, Penalty:
A fine of $1000 and 6 months imprisonment. On the other hand or is
disjunctive, taking items separately, proposing alternatives. For example
Penalty: A fine of $1000 or 6 months imprisonment. But practice is more
complex than this and sometimes and and or overlap in use. Certainly
or can have inclusive senses. For example, A or B may do X can be
interpreted either as A may do X, B may do X, both A and B may do X ,
or either A or B may do X, but not both of them.
121 The confusion and ambiguity that this overlap may cause in practice
may be counteracted by other linguistic devices. For example, to make
the conjunctive force of and certain, writers may use both ... and:
organizations that are both political and educational. The disjunctive use
of or can be highlighted by either ... or ... but not both: organizations that
are either political or educational but not both. Other ways of making the
meaning certain include: for any of A, B and C and A or B or both. The
solution will depend on the context.*
122 And/or should not be used in legal documents. It can readily be replaced.
For example, shares and/or options may be written shares, or options, or
both.

123 The particular force of these words should not be weakened by overuse.
Frequently the determiner may be omitted or the indefinite article may
be used, for example, Any director may be re-appointed may be written

1 . 'Style Manualfor Authors, 3rd ed. Editors and Printers, AGPS, Canberra, 1978.
2. For the treatment o f and and or in a series o f paragraphs, see paragraph 52.
 A director may be re-appointed or directors may be re-appointed. A n y is
best reserved for situations where there are no qualifications or
limitations, for example, A secretary may be dismissed at any time. Each
and every should be used if an obligation is to apply to all members of a
class and not just to a single member, for example, Each qualified state
officermay; Every qualified state officer may.

Deem

124 Deemed is obsolete. It should be replaced by considered, regarded, taken

or treated as. It should not be used even in the technical sense of
expressing a hypothetical case or legal fiction.
Duty (it shall be the duty on
125 Use must to express obligations, not it shall be the duty of.

Forthwith

126 Forthwith is obsolete. It is better to use as soon aspossible.

Gender neutral language

127 Gender neutral pronouns. It is now Government policy not to use
language in legislation which specifies gender, such as the pronouns he
and she and words such as chairman. Since there is no gender neutral
singular pronoun for the third person in English, the following devices
may be used:
Repeat nouns, for example: If a person holds particular
shares in a class of shares, the shares which the person holds
.
on account of another person ..
Use he or she, for example, A tenant may renew a lease if
he or she gives the landlord notice. Repetition of he or she
can become ungainly, for example, The offereecontravenes
this subsection if he or she knows that he or she is not entitled
to give the notice. It would be better in these cases to repeat
the noun in at least one instance, for example, The offeree
contravenes this subsection if the offeree knows that he or she
is not entitled to give the notice. Do not use he/she or s/he.
Replace third person singular pronouns wherever possible,
for example, say A director must submit the application not
A director must submit his application. The possessive can
sometimes be omitted altogether, for example A member
of a Tribunal may resign his officeby writing a letter signed
by him and delivered to the Minister may become A member
of a Tribunal may resign by writing to the Minister.
 Change nouns to plural, for example, A tenant may renew
a lease if he or she gives the landlord notice may be written
tenants may renew a lease if they give their landlords notice.

128 Gender neutral words. Avoid using sex-specific nouns such as chairman,
manpower, mailman, mankind, mothering and statesman. Try to select
words which are gender neutral, for example, personnel for manpower
and (to) staff for (to) man. Be prepared to consider the use of recently
invented words such as chairperson. This word is now recognized in
dictionaries, and may become as acceptable as other words which were
once opposed, like presidential, advocate, and speculatim. In amendments,
introduce non-sexist forms despite what might appear in the provisions
in the Act that are not being amended. It is against Government policy
not to do so.

Hereby

129 The use of hereby is generally unnecessary. It should be omitted in

contexts such as it is hereby agreed and section 5 3) is hereby amended.
Words such as agree, amend, declare, and promise, are effective without
the addition of hereby.

Lawful (it shall be lawful for)

130 Use may instead of it shall be lawful for.

Money

131 Use the word money. The form moneys or monies is obsolete and should
not be used.

132 Other is an adjective; otherwise, is its adverbial counterpart. They should

be used correctly, for example, she faced many hardships, financial and
other and not financial and otherwise; other parallels financial. Similarly,
say an employee may not appeal otherwise than in the prescribed manner
not other than; otherwise is an adverb modifying appeal.
Punctuation

133 The Style Manual sets out the generally accepted conventions of
punctuation. Punctuation assists readers. It is important for avoiding
ambiguity and confusion in meaning. Drafters should adhere to
conventions that are used elsewhere in the community. For example,
the absence of commas between items in a series is confusing for readers
who would expect commas in other writing:
55 (1) (c)require the production at the time and place
specified by the Inspector of any books registers certificates
notices records and documents required to be kept under
this Act and the production of any pay-sheets or books in
which ...
Construction Industry Long Service Leave Act 1983,
amended by section 16 of the Construction Industry Long
Service Leave (Amendment) Act 1985

The following subsection is better:

24 (3) On and from the commencement of section 10,
unless the context otherwise requires, any reference in any
Act or in any proclamation, appointment, Order in Council,
order, rule, regulation, legal proceedings, instruments,
document or writing of any kind whatsoever ...
Construction Industry Long Service Leave (Amendment)
Act 1985
Similarly, the following passage would read better if commas were
inserted before and after the group of words a copy ...Melbourne
Magistrates' Court:
30A (6) An order made under subsection (4) a copy or
certificate of which has been filed with the Clerk of the
Melbourne Magistrates' Court is deemed to be an order
requiring the payment of money made by a Magistrates'
Court and may be enforced accordingly.
Construction Industry Long Service Leave Act inserted by
section 11 (6) Construction Industry Long Service
(Amendment) Act 1985

Quantity

34 The problem in dealing with quantity concerns the point of reference.

There is a danger that it may be omitted from a provision. For example,
the phrases more than X and less than X do not take in X. If we wish to
include X then we need to use forms such as not less than X, X or more,
not more than X, and X or less. Similar problems occur with above,
below, nearer than and further than.
Referential words

135 These are words that we use in references to another part of a document,
for example above, abovementioned, aforesaid, below, herein, hereinafter,
hereinbefore, preceding, said, same, and succeeding. They should be avoided
because they are imprecise and frequently archaic. Herein, for example,
could refer to the section being read, a subsection, a Division, a Part or
even the whole Act. It is more satisfactory to use specific labels such as
5 1) a). Also, these words are often unnecessary. This is particularly
true of said and aforesaid. In the said person, for example, said is
superfluous. The definite article the is a specific reference. If there is a
possibility of ambiguity, the use of said cannot eliminate it. Below, for
example, in section 7 below, is also redundant; section 7 is sufficient to
indicate the location of the reference. Even following can cause problems
if the reference does not come immediately after it.

Save

136 Save is obsolete in the sense of except or but, for example, save as
otherwise expressly provided. It should be replaced by current words,
especially except.

Shall

137 Use must to describe obligations and not shall, for example, the Minister
must seek the advice not the Minister shall seek the a d ~ i c e . ~

Spelling

138 Spelling should follow Australian practice. The preferred spelling in

the latest edition of the Macquarie Dictionary should be used if a word
has an alternative spelling. If a word cannot be found in that dictionary,
then the Shorter Oxford English Dictionary should be used. The Style
Manual is also a useful source of information, for example, on matters
of capitalisation and the position of breaks in words.

3. See, Ministerial Statement by the Attorney-General, the Hon J H Kennan, MLC, Plain English,
7 May 1985.

61
Such

139 The use of such is often redundant, as for example, in such regulations
and such oficer. It should generally be replaced with a, the or these. For
example, such persons as should read the persons that.

.Subjunctive mood

140 The subjunctive mood occurs more frequently in American English

than in Australian or British English. It occurs in subordinate that
clauses and conditional clauses, for example, The Board may require
that the company secretary retire and If any person be found guilty. The
subjunctive is apparent only if the subject is singular. It disappears with
the plural. Compare:

subjunctive indicative
on retire retires
condition he retire
that retire
they
The indicative mood is far more frequent in everyday speech and can
be safely used in most constructions.

141 As a relative pronoun, that is not wrong, in fact, in most contexts that
and which are interchangeable. In some structures, however, which
alone can be used, for example, The company, which was acquired only
last year; That was the meeting during which I kept falling asleep.
Because that may refer to both personal and non-personal referents, for
example the member that the Government appointed and the building that
the company erected, it is useful when there is both a personal and non-
personal referent in the same sentence, for example, A person or body
that is given power. This is better than A person who or a body that is
given power. The relative pronoun whose may be used with a non-
personal referent, for example the building whose roof collapsed. This
saves the awkwardness of the roof of which.

Time

142 With some expressions of time it is certain that they include the reference
point, for example, on, not later than, not earlier than, after beginning
with, and ending with. As a result, ending with 31 December includes 31
December. Other terms are doubtful, for example, between ... and, from,
 to, before and until. To be certain of including the reference point,
writers must strengthen these terms. For example, to should read to and
including. Between ... and ... should be supported with inclusive, for
example, between I January and 28 January inclusive. To include a
date, before is often associated with on, for example, on or before 31
December. To save readers from having to cope with the two prepositions,
the expression could be rendered more simply as before 1 January.
Similarly, after 31 December is clearer than from and including 1 January
or on and after I January. Although on would seem to include the day,
section 44 (1) of the Interpretation of Legislation Act 1984 has the
effect that beginning on 1 January, would not include 1 January.
Somewhat inconsistently section 44 (2) provides that ending on 1 Janualy
includes that day.
143 Avoid superfluous words in expressions of times. For example, not less
than and at least are unnecessary in not less than 90 days notice and at
least 90 days notice. The person subject to this provision must give 90
days notice with or without these introductory words. Also, try to specify
time requirements precisely and accurately. Instead of words such as
within a reasonable time which is imprecise and immediately which is
rarely what is meant, say within fourteen days or within twelve hours.

Whatsoever- wheresoever- whosoever

44 These archaic expressions can be safely abandoned. They usually
contribute nothing to the meaning. For example, I hereby revoke all
wills and testamentary dispositions of every nature or kind whatsoever.
Whatsoever adds needless emphasis to all. Current forms are whatever,
wherever and whoever but a person who is preferable to whoever in most
contexts in Acts.
 FURTHER READING
A select list of texts providing a comprehensive introduction
for legal drafters.

PART 1: PLAIN ENGLISH

Aitken, J.K.
The Elements of Drafing 7th ed, Law Book Company, 1987.
Anderson, P.V, Brockman, R.J, and Miller, C.R. (eds) New Essays in
Technical and ScientificCommunication, Farmingdale, NY: Baywood
Publishing, 1983.
Bailey, E.P. Writing Clearly, Merrill, Columbus: 1984.
Benson, R.W. 'The End of Legalese: The Game is Over' (1986) 13
Review of Law and Social Change 519.
Bertrand, J. CommunicationsIn Testing Chicago: University of Chicago
Communications & Family Study Center, 1978.
Charrow, V. Linguistic Theory and the Study of Legal and Bureaucratic
Language, Document Design Center, Washington: 1981.
Charrow, V. & Erhardt, M. Clear & Efective Legal Writing, Little,
Brown, Boston: 1986.
Cutts, M. & Maher, C. Small Print, National Consumer Council,
London: 1983.
Darville, R. & Reid, G. Guidelines for Writing, Editing and Designing,
Canadian Law Information Council, Ottawa, 1985.
Duffy, T.M. & Waller, R. (eds) Designing Usable Texts, Academic, New
York, 1985.
Eagleson, R.D. 'Plain English in Banking Documents' in Baxt, R. (ed)
Banking Law 6 Practice 1986, Banking Law Association, Melbourne,
121-142, 1986.
Felker, D.B. (ed) Document Design; A Review of Relevant Research,
Document Design Center, Washington, 1980.
Felker, D.B., Pickering, F., Charrow V., Holland, V.M., Redich, J.
Guidelines for Document Designers, Document Design Center,
Washington, 1981.
 Elsenfeld, C. & Siegel, A. Writing Contracts in Plain English, West
Publishing, St Paul, Minn, 1981.
Flesch, R. How to Write Plain English: a Book for Lawyers and Consumers,
Harper & Row, New York, 1979.
Flower, L. Problem-solving Strategies for Writing, Harcourt, Brace
Jevanovitch, New York, 1981.
Givens, P.A. (ed) Drafting Documents in Main Language, Practising
Law Institute, New York, 1981.
Goswami, D., Redish, J., Felker, D.B. & Siegel, A. Writing in the
Professions, Document Design Center, Washington, 1981.
Goldfarb, A.L. and Raymond, J.C. Clear Understandings: A Guide to
Legal Writing, Random House, New York, 1982.
Gowers, E. The Complete Plain Words, HMSO, 3rd ed by Greenbaum,
S. & Whitmont, J., London 1986.
Jonassen, D.H. (ed) The Technology of Text, Englewood Cliffs,
Educational Technology, NJ, 1982.
MacDonald, D.A. Drafting Documents in Main Language, Practising
Law Institute, New York, 1979.
Mellinkoff, D. Legal Writing: Sense and Nonsense, West Publishing, St
Pauls, Minn, 1982.
Mellinkoff, D. The Language of the Law, Little, Brown, Boston, 1963.
Redish, J.C. The Language of the Bureaucracy, Document Design Center,
Washington, 1981.
Redish, J.C. 'Making Information Accessible to Readers' in Odell, C.L.
& Goswami, D.G. (eds) Writing in Nonacademic Settings, Guilford,
New York, 1985.
Redish, J.C. 'The Plain English Movement' in Greenbaum, S. (ed) The
English Language Today, Pergamon, Oxford, 1985, 125-38.
Vernon, T . Gobbledegook, National Consumer Council, London, 1980.
Williams, J. Style: Ten Lessons in Clarity and Grace, Scott, Foreman,
(2nd ed), Chicago, 1985.
Wydich, R.C. Plain English for Lawyers, Carolina Academic Press,
Durham, NC, 1985.

PART 2: DRAFTING MANUALS

Bennion, F. Statute Law, Oyez Longman, London, 1983.

Callaway, F.H. 'Drafting Notes' collected articles from Law Institute
Journal, 1974-5.
Dick, R. Legal Drafting, Carswell, Ontario, 1972.
Dickerson, R. Fundamentals of Legal Drafting, Little, Brown, Boston,
1965.
Dickerson, R. Materials on Legal Drafting, West Publishing, St Paul,
Minn, 1981.
Driedger, E.A. 'Legislative Drafting' in Canadian Bar Reviews xxvii,
1949, 3:291-317.
Driedger, E.A. A Manual of Instructionsfor Legislative &Legal Writing,
Department of Justice, Ottawa, 1982.
Driedger, E.A. The Composition of Legislation, Department of Justice,
Ottawa, 1976.
Piesse, E.L. The Elements of Drafting, 7th ed by Aitken, J.K., Law' Book
Co, Sydney, 1987.
Renton Committee, The Preparation of Legislation, HMSO, London,
1975.
Robinson, S. Drafting, Butterworths, Sydney, 1973.
Thornton, G.C. Legal Drafting, 3rd ed, Butterworths, London, 1987.
INDEX

Paragraph
Abbreviations ................................... .. ...............................................106
'Abovementioned' ............................................................................. 135
'Action' ..................... .
.. ...................................................................
97
Active or passive voice ..................................................................... 78ff
Acts
see Legislation
Adverbials ............ .
.. ..........................................................................
77
'Aforesaid' ........................................................................................ 135
..
'All' .............................. .........................................................
123, 144
.
.
'Alternatively' ................... ............................................................... 88
Ambiguity
definitions to avoid, .................................................................. 106
paragraphs to avoid, ...................... .
.. ........................................53
punctuation to avoid ,................................................................. 133
Amendments of legislation .................................................... 103, 110
And for related purposes' ........................................................ ......21 .
..
'And' ............................ .
. .....................................................54ff, 120ff
'Any' .................................................................................................. 123
Archaic words.................................................................................... 95
Audience
need of. to know purpose of documents ..................................... 17
Audience of legislation
important concepts and, ............................................................ 38
judges and lawyers as, ................................................................ 24
Members of Parliament as,...................................................... 24
needs of ...................................................................................... 25
officials as. ..................................................................................... 24
..
people affected as,.................................. .....................................24
perception of structure by, ............................................................ 26
Australian Government Style Manual ............................. 1 19. 133, 138
Australian spelling .............................................................................138
Capitalisation ...................... .
... .....................................................138
Charts
..
use of. in legislation ......................... ..........................................28
 Paragraph
Clauses
order of. in sentences,.................................................................... 74
Clear thinking
clear writing and ,........................................................................... 14
Commas .............................................................................................. 133
Communication
plain English as, ............................................................................ 1 1
Completeness
necessity for, .................................................................................... 9
Computer
concordances, .............................................................................. 1 17
preparation of definitions using, ................................................ 1 17
Concordances ...................................................................................... 1 17
Conjunctions
between paragraphs,................................................................... 54ff
Consumer contracts
technical terms in, .........................................................................92
Cross-references ................................................................................. 62ff
in definitions, ............................................................................... 110
Dates
how to express ..........................................................................142ff
'Deem' ................................................................................................. 124
'De facto partners' .......................................................................... 27, 106
'Default' ................................................................................................ 92
Definitions........................................................................................ 104ff
commonness of, ........................................................................... 108
consistency of, ............................................................................. 1 1 1
drafting of, ................................................................................. 11 3f
equivalents and, ........................................................................... 107
functions of .................................................................................. 106
generality of, ................................................................................ 1 0
Interpretation of Legislation Act 1984 and, ............................... 109
position of, in Acts,...................................................................... 118
preparation of, by computer,....................................................... 117
substantive content within, ......................................................... 112
unnecessary inclusions in, .......................................................... 1 0 9
Dickerson, Professor R ........................................................................... 6
Dictionaries ......................................................................................... 138
Doublets and triplets .............................................................................99
'Duty' ................................................................................................... 125
'Each' ................................................................................................... 123
'Every' ................................................................................................. 123
Explanatory footnotes .....................................................................60, 91
Footnotes ............................................................................................... 60
Formulas
use of, in legislation ....................................................................... 28
'Forthwith' .......................................................................................... 126
French words ........................................................................................98
Gender neutral language .................................................................. 127f
 Paragraph
Grammar ........................................................................... 69$ 140
and see Sentences
Headings
as device for revealing structure. ................................................ 41
'Hereby' .................... . ................................................................... 129
'Herein' ........................................................................................... 135
'In relation to' ................................................................................... 116
Index ................... .
.. ...................................................................... 61
Interpretation of Legislation Act 1984........................................ 109
Judges and lawyers
as audience of legislation,........................................................ 24
Labelling
paragraphs and subparagraphs, ............................................... ..57
Latin words ........................................................................................ 98
'Lawful' ............................................................................................130
Legislation
amendment of, ............................................................. 103, 110
audience of, ............................. ...............................................24
avoidance of unnecessary concepts in ,................................. -2230
central message of, ................... .
... .
.. ..... ....................10
definition sections in, ............................................................. 104ff
definition sections, position of in, ........................................... 118
headings in, ................. ... ...................................................... 41
index in, .................................................................................. 61
objectives sections in, ................. ...... ......................................20
omission of unnecessary material from ,........................ ... 29
organisation and layout of, .................................................. 1 0
organisation of, ....................................................................... 31ff
paragraphs in, ......................................................................... 50ff
parts and divisions in, .................................................................44f
preambles to, .......................... .. ..............................................
22
.
.
purpose of Acts .......................... ............................................ 1 5
schedules in, ................................................ .........................59
sections in, ............................................................................... 46f
titles to, .......................... .
.. ..............................................19,40
use of formulas, maps, charts and tables in ,.............................. 28
Macquarie Dictionary .................................................................. 138
Maps
use of, in legislation .......... . ........................................................28
Marginal notes ....................................................................................... 60
Members of Parliament
as audience of legislation .......... ... .......................................... 24
Mood
subjunctive and indicative, ........................................................ 140
'Must' ................... .
.. .............................................................. 9 6 125
Negatives ...................................................................................... 84ff
'Nevertheless' .................................................................................. 88
'Notwithstanding' ........................... .
. .....................................6 8 88
......
Nouns ................ .................................................................... 83
 Paragraph
Objective sections
Victorian legislation in. ................................................................. 20
'Of this Act' ........................................................................................... 67
Officials
as audience of legislation ,.............................................................. 24
'Or' ........................................................................................... 54ff, 120ff
Organisation and layout
legislation of, ................................................................................. 10
Organisation of legislation ................................................................. 31ff
cross-references, ......................................................................... 62ff
explanatory footnotes, ................................................................... 60
headings, ........................................................................................ 41
how to express special circumstances. .......................................... 68
important items first. ................................................................... 36f
indexes. .......................................................................................... 61
levels of structure.......................................................................... 43
paragraphs and subparagraphs. ..................................................50ff
Parts and Divisions. ....................................................................... 44
revealing. ..................................................................................... 39f
schedules....................................................................................... 59
sections. ......................................................................................... 46
subsections ,.................................................................................. 48f
Oxford Dictionarv ............................................................................... 138
Paragraphs and subparagraphs .......................................................... 50ff
conjunctions between. ...................................................................54
labelling of. .................................................................................... 57
sub-subparagraphs and. .................................................................58
Parts and Divisions ................................................................................ 44
Plain English
nature of. .................................................................................. 6ff. 8
Preambles ..............................................................................................22
'Principal Act' ....................................................................................... 27
Prohibitions ...........................................................................................86
Pronouns
gender neutral ............................................................................. 141
that which whose ......................................................................... 127
Punctuation ....................................................................................... 133f
Purpose of document
relevance to drafting ................................................................... 15ff
Quantity
how to express. ............................................................................ 134
Readers of legislation
see Audience of legislation
'Related purposes' .........................................;.......................................21
Repeal ....................................................................................................68
Repetition of words ......................................................................... 16, 49
Rule of law
plain English and. ........................................................................... 7
 Pa ragraph
'Said' ........................................................................................... 1 3 5
'Save' ............................................................................................... 136
Schedules .................... . ....................................................................59
Sections and subsections ......................... . ........................................ 46f
Sentences
active or passive voice in, ...................................................... 78ff
adverbials in ,......................... . ...................................................77
cohesion among ,....................................... . ........................... 87
length of ,................. . ................................................................. 70
order . . of clauses within, ..................... . ....................................... 73
posltive or negative,................................................................... -84
........
structure of, .................... ..............................................74
subparagraphs and, ........................................................................ 52
verbs in ,.................. . . . .......................................................... 75ff
within subsections, ...................... . ..............................................46
Sexist language
see Gender neutral language
'Shall' ......................... ....................................................96, 109, 137
'Similarly' ............................ .
.. ......................................................... 88
Spelling ............................................................................................ 138
Structure of legislation
grammatical, ...................... . . . . ............................................69ff
levels of, ........................ . .................................................. 69ff, 43
Style Manual ....................... . .......................................... 119, 133, 138
Subjunctive mood ............................................................................... 140
Subparagraphs............................................................................... 50ff
Sub-subparagraphs .............................................................................. 58
Subsections ......................................................................................... 48ff
'Such' ................. . .. ......................................................................... 139
Technical terms
see Words
Terms of art ............................................................................................91
and see Words
Time
how to express ......................................................................... 142f
Titles
Acts to ....................... . . .. .... . ..... . . 19, 40
Verbs
main and auxiliary,...................................................................... 75
nouns from, ................................................................................ 83
separation from subject of, ................... .
.. ................................ 76
Vocabulary ...................................................................................... 89ff
and see Words
'Whatsoever' .............................. ...... ........................................ 144
'Where' .................... . . . ................................................................ 96
'Which' ........................................................................................ 141
'Whose' ................................................................................................141
.......
Words............... ................................................................... 89ff
amending legislation in, .......................................................... 1 0 3
 Paragraph
archaic. ................................................................................... 95ff
definition sections,........................... ......................................104ff
doublets and triplets, ............................ . .................................. 99
elegant variation of, ................................................................. 102
French, ..................... . ..............................................................98
inflated, ......................................................................................101
Latin, ............................................................................................ 98
litigated, ........................................................................................ 90
overlapping, .............................................................................. 1 0 0
referential, ................................................................................ 135
same referent, with ,....................... . . ........................................ 106
special legal meaning where, ........................ . . ........................ 93
specific, ...................................................................................119ff
technical, ............................ . . .........................................92, 106
terms of art ,..................................................................................91
Writing
necessity to consider purpose of document before, ...................15ff
I

I asked him to come to meet me tomorrow and,

mean while, would he note down on paper his precise
thoughts as to whether or not Humphrey is overstretched
and send them over to me.
An hour later his though& amied, dubnoted These
are they:

H M Treasury
Permanent Secretary
March 2

Dear Prime Minister,

When I said that HA was not overstretched, I was of

course talking in the sense of total cumulative loading
taken globally rather than in respect of certain individual
and essentially anomalous responsibilities which are not,
logically speaking, consonant or harmonious with the broad
spectrum of intermeshing and inseparable functions and could
indeed be said to place an excessive and supererogatory
burden on the office when considered in relation to the
comparatively exiguous advantages of their overall
consideration.

yours ever,

I read it car$ul. several times. My conclusion: he

could do Part ofNomphreysjob.
LAW REFORM COMMISSION O F VICTORIA
.- @, ic:i.?n
,
. q~ ,I.

PLAIN ENGLISH
AND T H E LAW
 ACKNOWLEDGEMENT
Back cover reproduced from Yes Prime Minister,Volume 1, by Jonathan Lynn
and Antony Jay, with the permission of BBC Enterprises Ltd.

ISSN 0818 7320

ISBN 0 7241 6561 6
Law Reform Commission of Victoria

Appendix 2

PLAIN ENGLISH
AND TH LAW

Plain English
Rewrite
Takeovers Code
Takeovers Code Introduction

TAKEOVERS CODE
PLAIN ENGLISH REWRITE

Nature and purpose

This document contains a rewrite in plain English of the Companies

(Acquisition of Shares) (Victoria) Code as at December 1986.' It was
prepared by the Commission with the assistance of a number of expertsa2
One of the Commission's aims is to demonstrate that legislation, even
on the most complex subject, can be written in plain English. Another
aim is to demonstrate that the present style of legislative drafting could
be substantially improved without a loss of precision.
In redrafting the Code, the Commission sought to retain all the detail
in the original. If there are instances where some detail has been missed
as a result of translation difficulties, it could easily be included without
affecting the intelligibility or the improvements in style of the plain
English version.
The Commission does not suggest that its rewrite of the Takeovers
Code can be understood by the average citizen. The average citizen
lacks the knowledge of the share market and the operation of companies
which is necessary for understanding a document dealing with takeovers.
However, the rewrite can be understood by a much wider audience than
the original version. T h e reason lies in improvements made to the
language and structure of the original Code.

1. Some parts of the original Code were excluded from the exercise. They include
transitional provisions; the Schedule to the Code setting out the content of Part A-
Pan D statements; and certain provisions (for example, 16 (12), 17 (17) which affect
the content of these statements).
2. These included Mr Bruce Cameron of Gledhill Burridge & Cathro; Ms Marina
Darling of Corrs Pavey Whiting & Byrne; Mr Mark Dickens, then General Counsel
to the National Companies & Securities Commission; Mr Mark Dreyfus, then
Ministerial Adviser to the Attorney-General; Mr John Ewens, CMG CBE QC former
First Parliamentary Counsel of the Commonwealth;Professor Harold Ford, Chairman,
Companies & SecuritiesLaw Review Committee; Ms Eve Grimm of the Law Institute
of Victoria; Mr Peter Ickeringill of Mallesons Stephen Jaques; Mr Ian Jamieson,
Corporate AffairsCommission; Mr Peter Marks of McIntosh Hamson Hoare Govett
Ltd; Mr Leigh Masel, a part-time member of the Commission and former first
Chairman of the National Companies & SecuritiesCommission; and Mr Ian Renard
of Arthur Robinson and Hedderwicks Mr Renard was briefed to assist in settling the
final draft.
Takeovers Code Introduction

That is not the only benefit of writing legislation in plain English. The
experts who assisted the Commission agreed that, if legislation were
written in the style of the plain English version rather than that of the
original, they and their clients would save a large amount of time and
money.

Format

To enable comparisons to be made between the plain English version

and the original, the document sets out the plain English version on the
left hand side and the original on the right. The original has been cut
and pasted to show the particular subsections of the original from which
each section of the plain English version has been constructed. However,
that has not been done in the case of original sections 39 and 44 which
include tables (in the plain English versions) not found in the original.
In both cases, a concordance is included in a footnote.
Because the format of the document is aimed at enabling quick
comparisons to be made between the plain English version and the
original, no attempt has been made to improve the readability of the
text by using larger type and different typefaces. An index is attached to
the plain English version in accordance with a suggestion in the body
of the report. One improvement in cross-referencing also deserves
mention. In the original, there are numerous sections containing
definitions of various types. There is no cross-referencing to those
definitions when the words are used in the body of the Code. The plain
English version eliminates definitions wherever possible. Those that are
necessary are collected in the one place and each first use of a defined
word in a section is starred, with a footnote cross-reference.

Structure

The format of the document is aimed at enabling language comparisons

to be made. Consequently, it may not reveal, at first glance, the extent
of the structural improvements which have been made.
Like other Victorian legislation, the original version commences with a
number of provisions dealing with peripheral or ancillary matters,
including definitions. In the plain English version, this material has
been relegated to the end of the body of the Code and to Schedule 2.
The plain English version introduces the reader immediately to the
Code's central principles.
In a number of instances, the original version unaccountably separates
closely related material. For example, sections 16 and 18 dealing with
takeover schemes are separated by a section on takeover announcements.
That section is itself separated (by some 14 sections) from other sections
Takeovers Code lntroductlon

on takeover announcements. Similar poor organisation is sometimes

found within individual sections. The plain English version rearranges
the material in a different order which imposes far less strain upon the
audience.
The original version contains many sections which are extremely long.
In some cases, one section deals with more than a single issue or set of
issues. In the plain English version, these issues are dealt with in separate
sections. Even where an original long section deals with closely inter-
related issues, these have been covered, wherever possible, in separate
sections in the plain English version.
T o appreciate fully the extent of the re-organisation in the plain English
version, it would be necessary to compare the plain English version
with the original version in its uncut form. However, some idea of the
extent of the re-organisation can be obtained from the following
comparative table.
Takeovers Code Comparison

COMPARATIVE TABLE

Plain English
1

16 (1)
16 (2) (a)-(e)
16 (2) ,n (@ (2AA) (2AB)
16 (2) (h) (j), 20
16 (2) (c)-(e), 24
18 (1)-(2A)
18 (1) (b) (iig
22 (1) (2) (4)
22 (3) (5)
23 (1)-(3)
25
25A
25B
25C
21
27 (1)-(3)
27 (4)-(7)
27 (8)-(9)
27 (8) (10) (11) (13), 15
27 (14)
27 (12)
27 (16) (17)
19
28 (1) (2)
28 (3)
28 (4)-(8) (10)
28 (9)
30
31
31A
31B
17 (1) (3)
17 (2) (6)
17 (4) (5) (10) (17)
17 (12)-(14)
17 (8) (9)
17 (11) (13)
17 (15) (16)
32
33
34
35
39
39A
 Takeovers Code Cornpariaon

Plain English Ora'ginal Code

47 39B
48 4098 (9)
49 36
50 41
51 37 (1)-(3)
52 38
53 42 (1)-(3)
54 42 (7)-(10)
55 42 (11)-(18)
56 43 (1)- (4) (7)
57 43 (4)-(7)
58 51
59 52
60 44
61 44
62 8 (10)
63 53, 55, 8 (11)
64 46
65 47
66 48
67 50 (1) (2) (5)
68 50 (3) (4)
69 7 (1),58 (1),59
70 60 (1) (3) (6) (7)
71 60 (2) (4) (5)
72 60A
73 61
74 45
75 49
76 49 (6)
77 8A
78 56
79 2
80 3
81 4,5
82 10
[SCHEDULE 1-not reproduced]

SCHEDULE 2
1
2
3
SCHEDULE 3
1
INDEX
Takeovers Code Contents

TABLE OF CONTENTS

PART 1-BASIC PRINCIPLES 2

1 Takeovers must proceed under a scheme or announcement 2
2 Exception in relation to gradual acquisition 4

PART 2-TAKEOVER SCHEMES

Division 1-Offers and Part A Statements
3 How may offers be made?
4 What type of offers must be made?
5 What must the offers contain?
6 What must the offers not contain?
7 What procedures must be followed?
8 Part A statement and a copy of the offer must be
registered with the Commission
9 Service of a Part A statement

Divisions 2-Part B Statements 22

10 Obligation on the target company to provide a Part B
statement 22
11 Reference in a Part B statement to expert reports 24
12 Special requirements if the offeror is connected with
target company 24

Division 3-Effect of Offers in Special Circumstances 28

13 What happens if someone else is entitled to the shares? 28
14 What if the offeree holds the shares for someone else? 30
15 Effect of acceptance of a proportional offer 36
16 Multipliers prevented 36
TakeoversCode Contents

Division 4-Withdrawal and Variation of Offers 38

17 Withdrawal of offers 38
18 In what circumstances may an offer be varied? 38
19 Variation of consideration 40
20 Variation of the offer period 42
21 What must the offeror do to vary an offer? 44
22 In what circumstances may the Commission register a notice? 46
23 Effect on an offeror who has accepted an offer 48
24 Validity of acquisitions when the variation of an offer
contravenes Code 48
25 Obligation to provide consideration unless time is varied 50

Division 5-Offers and Contracts which are Subject to Conditions 52

26 When may the offeror declare the offers and contracts
unconditional? 52
27 Procedure for giving notice of a declaration 52
28 Notice concerning defeating conditions 54
29 What if the offers are not freed from a defeating condition? 56
30 Effect of acceptances outside scheme on offers subject to
certain conditions 56

Division 6-General 58
31 Offeree's entitlement if the offeror acquires shares
outside the scheme 58
32 Voting requirements under target company's takeover
approval provisions 64
33 Insertion and removal of takeover approval provisions 70

PART 3-TAKEOVER ANNOUNCEhlENTS 76

Division 1-Announcements and Part C Statements 76

34 In what circumstances may a takeover announcement be made? 76
35 What must a takeover announcement state? 76
36 What procedures must be followed? 78
Takeovers Code Contents

Page

37 Offeror may extend the offer period 80

38 Effect of paying a higher price than offered 82
39 Effect of action by a target company that affects
the value of shares
40 Liability of members of a stock exchange 84

Division 2-Response of the Target Company: Part D Statement 86

41 Obligation on a target company to provide a Part D statement 86

Division 3-Withdrawal and suspension of Offers 88

42 When may the offeror withdraw the offers? 88
43 Commission's power to suspend offers 92

PART 4-PROVISIONS APPLYING TO BOTH

SCHEMES AND ANNOUNCEMENTS 94

Division 1-Obligations on Offerors and on Certain Other Persons 94

44 Restriction on an offeror's right to dispose of shares 94
45 Notification of acquisition and disposal of shares in a
listed company %
46 Notification of acquisition of shares in an unlisted company 106
47 Prohibition on additional benefits to person who sell shares
before offers are made 108
48 Prohibition on additional benefits to offerees or associates 114

Division 2-Obligations on Target Company 116

49 What information must a target company provide? 116
50 Director's right to refund of expenses 116

Division 3-Profit Forecasts and Asset Valuations 118

51 In what circumstances may a profit forecast be made? 118
52 In what circumstances may an assets valuation
statement be made? 120
Takeovers Code Contents

Page

Division 4-Rights of Shareholders 124

53 Circumstances in which an offerormay acquire shares
compulsorily 124
54 Rights of shareholders who are sent a notice of compulsory
acquisition 128
55 How to complete a compulsory acquisition
56 Rights of remaining shareholders
57 Rights of holders of non-voting shares, options and notes 136

Division 5-Duties of Person Making Minutes 140

58 Record of names of directors in relation to resolutions 140

PART 5-GENERAL 142

Division 1-0fTences 142

59 Misstatements concerning proposals to make offers 142
60 Offences relating to misstatements 146
61 Compensation for loss resulting from misstatements 158
62 Presumption concerning a person's knowledge 160
63 Offence to contravene Code 160

Division 2-Powers of Court and Commission

64 Powers of Court if the offers relating to a Part A
statement are not sent
65 Powers of Court to protect the interests of persons
affected by a breach
66 Powers of Court in relation to inadvertent breach of Code
67 Application for a declaration that an agreement,
payment or benefit was unfair or unconscionable
68 Powers of Court in making a declaration I

69 Powers of Commission to exempt from Code or modify its

application
70 Powers of Commission to declare an acquisition of
shares or other conduct unacceptable
71 Power of Court with respect to a declaration

xii
Takeovers Code Contents

Page

72 Power of Commission to make orders while a declaration

is in force 184
73 Power of Commission to intervene in proceedings 188
74 Powers of Court in relation to prohibited acquisition of shares 190
75 Miscellaneous provisions relating to powers of Court
under this Division 194
76 Powers of Commission in relation to interests vested in it 198

Division 3-Service and Publication

77 Approved manner of sending documents
78 Service of documents and of notices

Division 4-General
79 Commencement
80 Agreement
81 Code subject to other Acts
82 Persons to whom Code applies

SCHEDULE 1 204

SCHEDULE 2-DEFINITIONS
1. General
2. Associate
3. Relevant Interest

SCHEDULE 3
Acquisitions not Affected by Basic Principles

INDEX

xiii
 Takeovers Code

Companies (Aquisition of Shares)

(Victoria) Code
Takeovers Code Section 1

PART 1 - BASIC PRINCIPLES

1 Takeovers must proceed under a scheme or announcement

1) A person must not acquire* shares* in a company* except by the

acceptance of offers* to acquire those shares under a takeover scheme*
or a takeover announcement* if, as a result* of the acquisition*, that
or some other person-
a) would become entitled* to more than 20% (but, if a lesser O/o
is prescribed, that Oh) of the voting shares in the company; or
6) if he or she is already entitled to that OO/ but to less than 90%
of the voting shares in the company-would become entitled
to a greater % of those shares.

2) Subsection (1) does not apply to an acquisition referred to in section 2

or Schedule 3. However, an offeror* who acquires shares in a target
company* under paragraph ( I ) of Schedule 3 is not entitled to exercise,
or authorise some other person to exercise, any voting rights in relation
to those shares without the written consent of the Commission unless
the offeror sent* out the relevant offers within 28 days after service of
the Part A statement.*

3) A person must not offer to acquire, or issue* an invitation* in relation

to shares in a company if the person is prohibited by subsection (1)
from acquiring those shares.

4) It is a defence to a prosecution for a contravention of this section if the

defendant proves that the contravention was due to his or her
inadvertence or mistake or to being unaware of a relevant fact or
circumstance (other than ignorance or mistake of law).

5) An acquisition of shares is not invalid by reason of a contravention of

this section.

Note. Original 11 (4): supplemented, as to

ignorance or mistake of law, by original 8 (1 1 )
(see Schedule 2).
Original 11 (7): creation of unnecessary
concept- 'prescribed percentage'- built into
plain English version.
* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

Restriction on acquisition of shares

11. (1) Except as provided by this Code, a person shall not, either alone
or together with another person or other persons, acquire shares in a
company if any person who is not entitled to any voting shares in the
company or is entitled to less than the prescribed percentage of the voting
shares in the company would, immediately after the acquisition, be entitled
to more than the prescribed percentage of the voting shares in the colnpany.
(2) Except as provided by this Code, a person shall not, either alone or
together with another person or other persons, acquire shares in a company
if any person (in this sub-section referred to as a "relevant person") who is
entitled to not less than the prescribed percentage, but less than 90%, of
the voting shares in the company would, immediately after the acquisition,
be entitled to a greater percentage of the number of voting shares in the
company than the percentage to which that relevant person was entitled
immediately before the acquisition.

[See section 12, reproduced in Schedule 31.

(3) A person shall not offer to acquire, or issue an invitation in relation

to, shares in a company if the person is prohibited by sub-section (1) or (2)
from acquiring those shares.

(4) It is a defence to a prosecution for a contravention of this section if

the defendant establishes that the contravention was due to his inadvertence
or mistake or to his not being aware of a relevant fact or occurrence.

(5) An acquisition of shares is not invalid by reason of a contravention

of this section.
(7) A reference in this section to the prescribed percentage is a reference
to 20% or, where a lesser percentage is prescribed by regulations in force
for the time being for the purposes of this section, a reference to that lesser
percentage.
Takeovers Code Section 2

2 Exception in relation to gradual acquisition.

A person may acquire* voting shares* in a company* if, as a result* of the

acquisition*, that or any other person who has been entitled* to 19% (but,
if a lesser OO/ is prescribed, that 0%) of the voting shares for the preceding 6
months does not have his or her entitlement increased by more than 3
under the formula-

where-

a is the number of voting shares to be acquired;

b is the number of voting shares acquired by anyone in the

preceding 6 months (other than shares acquired by the person
by allotment under clause 1 (e) in Schedule 3 that led to an
increase in the person's entitlement to voting shares;

c is the number of voting shares disposed* of by anyone in the

preceding 6 months that led to a decrease in the person's
entitlement to voting shares; and

d is the number of voting shares in the company.

Note. Original 15 (I): creation of unnecessary

concepts- 'relevant person '; 'prescribed
percentage'- both built into plain English
version.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

Acquisition of not more than 3% of voting shares permitted in each 6

months
15. (1) Section 11 does not prohibit an acquisition of voting shares in a
company by reason of the effect of the acquisition on the entitlement to
voting shares in the company of a person (in this section referred to as a
"relevant person") if the relevant person has been entitled to not less than
the prescribed percentage of the voting shares in the company for a
continuous period of not less than 6 months immediately preceding the
acquisition and the number ascertained in accordance with the formula

100 ( a + b - c )
d does not exceed 3, where-
a is the number of voting shares to be acquired;
b is the number of voting shares in the company that were acquired by
any person during the period of 6 months immediately preceding the
first-mentioned acquisition, being voting shares the acquisition of which
by the person concerned increased the number of voting shares in the
company to which the relevant person was entitled, other than voting
shares acquired by the person concerned pursuant to an allotment in
relation to which sub-section 14 (1) applies, being an allotment made
to the person concerned as a result of his acceptance of an offer made
to him in accordance with paragraph 14 (2) (b);
c is number of voting shares in the company that were disposed of by any
person during the period of 6 months immediately preceding the first-
mentioned acquisition, being voting shares the disposal of which by
the person concerned decreased the number of voting shares in the
company to which the relevant person was entitled;
d is the number of voting shares in the company.
(2) A reference in sub-section (1) to the prescribed percentage is-
(a) a reference to 19%; or
(6) where a lesser percentage is prescribed by regulations in force
for the time being for the purposes of this section-a reference
to that lesser percentage.
 Takeovers Code Section 3

PART 2 - TAKEOVER SCHEMES

Division 1-Offers and Part A Statements

3 How may offers be made?

A person may make offers* under a takeover scheme* in relation to a class*

of shares* only in accordance with this Division.

4 What type of offers must be made?

1) Offers* must be made to each, registered holder of shares* of that

class*.

2) Each offer must cover all or the same proportion of the shares held by
each offeree.

3) Each offer must be the same except for differences in the consideration
based solely on the fact that different shares have different accrued
dividend entitlements or different paid up amounts.

Note. Original 16 (2): creation of unnecessary

concept-'relevant class of shares'-built into
plain English version.
Original 16 (2) (b) (i): stating the
obvious for no good reason.
Original 16 (2) (c): in providing that
the offeror need not send an ofleer to itself, stating
the obvious for no good reason.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

Take-over offers
16. (1) Section 11 does not prohibit the acquisition of shares in a company
as a result of the acceptance of offers tu acquire those shares made under a
take-over scheme in relation to that company.

(2) For the purposes of this Code, offers to acquire shares are made
under a take-over scheme if, and only if, the offers relate only to shares
included in a class of shares (in this section referred to as the "relevant
class of shares3')and-
(a) one of the following sub-paragraphs is applicable in relation to
the offers:
(i) each offer relates to all the shares in the target company
included in the relevant class of shares that the offeree
holds;
(ii) each offer relates to a proportion of the shares in the target
company included in the relevant class of shares that the
offeree holds, being a proportion that is the same in respect
of each offer;
(b) the offers are the same disregarding-
(i) the fact that the offerees are different persons and the fact
that the number of shares that may be acquired under
each offer is limited by the number of shares held by the
offeree; and
(ii) any differences in the consideration specified for each
share in the offers that are attributable only to the fact
that the offers relate to shares having different accrued
dividend entitlements or relate to shares on which different
amounts are paid up;
(c) [relevant in part: reproduced opposite plain English section 7
(11.1
(d) [reproduced opposite plain English section 7 (2)].
(e) [reproduced opposite plain English section 7 (3)].
Takeoven Code Section 5

5 What must the offers contain?

1) Each offer* must be in writing and must-

a) have the same date, which must be not later than, and no more
than 3 days before, the date the offer is sent*; and

6) specify the date until which the offer will remain open, which
must be between 1 and 6 months after the date of the offer;
and

C) set out the total number of shares* in each class* and the
number or percentage to which the offeror* was entitled*
immediately before the offer is sent; and

d) set a date between 7 and 14 days before the end of the offer
period* for publication of the notice required by subsection
28 (1) if the offer is subject to a defeating condition*; and

e) explain how and when the obligations of the offeror are to be

satisfied; and

f) provide for the payment or provision of the consideration-

i) on or before the 30th day after acceptance; or

ii) if the offer is subject to a defeating condition*-on or

before the 30th day after the later of the acceptance
and the offer or contract becoming unconditional, but
no later than the 21st day after the end of the offer
period; and

g be accompanied by a copy of the Part A statement* and of any

accompanying report and, if a Part B statement* has been
given* to the offeror within 14 days after receipt of the Part A
statement, a copy of the Part B statement and of any
accompanying report.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

16. (2) ( f ) each offer is in writing and-

(i) bears the same date, being a date that is not more than 3
days before the date on which the offer is dispatched and
is not later than the date on which the offer is dispatched;
(ii) states that the offer will, unless withdrawn, remain open
during a period ending on a specified date, being a date
that is not earlier than one month, or later than 6 months,
after the date that the offer bears;
(iv) specifies, in relation to each class of shares in the target
company-
(A) the total number of shares included in the class; and
(B) the number of shares included in the class to which
the offeror was entitled immediately before the offer
was dispatched (which may be expressed as a number
of shares or as a percentage of the total number of
shares included in the class);
(v) in the case of an offer that is subject to a prescribed
condition-specifies a date, being a date that is not less
than 7 days and not more than 14 days before the end of
the period during which the offer remains open, for the
publication of the notice referred to in sub-section 28 (4);
(vi) sets out how the obligations of the offeror are to be satisfied;
(vii) contains a provision setting out when the obligations of
the offeror are to be satisfied, being a provision under
which the consideration for the offer is, if the offer is
accepted, to be paid or provided-
(A) in the case of an offer that is not subject to a prescribed
condition-on or before the thirtieth day after the
offer is accepted; or
(B) in the case of an offer that is subject to a prescribed
condition on or before the thirtieth day after the offer
is accepted, or the offer, or the contract resulting
from the acceptance of the offer, becomes
unconditional, whichever happens later,
or, if that day is later than the twenty-first day after the
end of the period during which the offer would, if it had
not been accepted, have remained open, on or before the
last-mentioned day; and
(viii) is accompanied by-
(A) a copy of the Part A statement referred to in sub-
paragraph (d) (a); and
(B) if the target company has, not later than 14 days after
receipt of that Part A statement, given to the offeror
a Part B statement in relation to the offers-a copy
of that Part B statement and a copy of any report that
accompanied that Part B statement.
Takeovers Code section6

2) If the consideration payable under an offer is solely a cash sum or

includes an alternative which is solely a cash sum, the price offered
per share must be-

Q) not less than the highest price for which the offeror or an
associate* bought or agreed to buy shares in the relevant class
(excluding price escalations provided for by the agreement),
within 4 months before, and not later than the day of, the
sending of the first offer; or

6) an amount that the Commission approves in writing on the

offeror's application if the target company* within that
period-

i) made*, agreed to make, or announced a proposal to

make, or to agree to make, an allotment of shares; or

ii) granted, agreed to grant, or announced a proposal to

grant or to agree to grant, an option to subscribe for
shares; or

iii) issued*, agreed to issue, or announced a proposal to

issue or to agree to issue, convertible notes*; or

iv) declared, or announced a proposal to declare, a

dividend.

* See Schedule 2.
 Companies (Acquisition of Shares) (Vkmia) Cade

16. (2AA) For the purposes of paragragh (2) (g), where a person has entered
into an agreement for the purchase of a share or shares in a company,
being an agreement that provides that the price payable for the share or
any of the shares is a price (in this sub-section referred to as the "original
price") specified in the agreement but may be varied in accordance with
the terms of the agreement, the price agreed to be paid for the share or
any of the shares shall be deemed to be the original price.

(2) (g) in a case where-

(i) the consideration that under each of the offers is to be
paid or provided for the acquisition of the shares to which
the offer relates consists solely of a cash sum or includes
alternative considerations one of which consists solely of
a cash sum; and
(ii) during the period of 4 months ending on the day on
which the first of the offers is dispatched, the offeror, or a
person associated with the offeror, purchased or agreed to
purchase shares in the target company including in the
relevant class of shares,
the amount per share of that cash sum is not less than-
(iii) unless sub-paragraph (iv) applies-the highest price per
share paid or agreed to be paid, pursuant to such a purchase
or agreement to purchase, for any of the shares first
referred to in sub-paragraph (ii); or
(2AB) Upon application by an offeror who proposes to dispatch offers
to acquire shares included in a class of shares in a company, the Commission
may, by instrument in writing, approve, for the purposes of paragraph (2)
(g), a specified amount in relation to the offers.
(2) (g) (iv) if the target company, at any time during that period-
(A) made, agreed to make, or announced a proposal to
make, or to agree to make, an allotment of any of its
shares;
(B) granted, agreed to grant, or announced a proposal to
grant, or to agree to grant, an option to subscribe for
any of its shares;
(C) issued, agreed to issue, or announced a proposal to
issue, or to agree to issue, convertible notes; or
(D) declare, or announced a proposal to declare a
dividend,
and an approval by the Commission of an amount in relation
to the offers is in force under sub-section (2AB)-the last-
mentioned amount;
Takeovers Code section5

3) In addition to the information referred to in Schedule 1, a Part A

statement may contain any information (that is not materially false or
misleading) that the ofieror think fits.

Note. Original 16 (2) (fl (ii): unnecessary

qualification- 'unless withdrawn'.
Original 16 (2AA): unnecessary
concept: 'originalprice'- built into plain English
version.
Original 16 (3): unnecessary
qualification-'in the form or context in which
it appears: Whether information is false or
misleading always depends on its form and
context.

6 What must the offers not contain?

1) An offeror* must not make an offer* which is subject to a condition

whose fulfilment or failure depends wholly or partly on whether-

a) the number of shares* covered by acceptances; or

b) the number of offers accepted,

exceeds a particular number.

2) An offeror must not make an offer which is subject to a condition that

permits the offeror to acquire*, or that may result* in the offeror
acquiring, shares in the relevant class* from some but not all of the
persons who accept.

* See Schedule 2.

12
 Companies (Acquisition of Shares) (Victma) Calc

16. (3) A Part A statement referred to in this section may contain, in

addition to the information referred to in this section and Part A of the
Schedule, such information as the offeror thinks fit, not being information
that is false in a material particular or materially misleading in the form or
context in which it appears.

(2) (h) none of the offers is subject to a condition (however expressed,

and whatever the purported effect of fulfilment or
failure of the condition) the fulfilment or failure
of which depends on, or depends on matters
including, one or both of the following matters:
(i) Whether the number of shares in respect of which the
offeror receives an acceptance or acceptances of one or
more of the offers exceeds a particular number of shares;
(ii) whether the number of offers accepted exceeds a particular
number, however the particular number was, or is to be,
determined, whether or not the particular number is
specified in the condition and, if the particular number is
so specified, however the particular number is expressed;
and
O without limiting the generality of paragraph (h) none of the
offers is subject to a condition (however expressed) that permits
the offeror to acquire, or that may result in the offeror acquiring,
shares included in the relevant class of shares from some but
not all of the persons who accept the respective offers made to
the last-mentioned persons.
Takeovers Code Section 6

3) An offeror must not make an offer subject to-

a> a condition that requires the offeree to agree to a benefit being

given* to a director, secretary or executive officer of the target
company* or of a related corporation as compensation for the
loss of, or as consideration in connection with retirement from,
an office connected with the management of the target
company or of a related corporation; or

6) a defeating condition* that the offeror receive acceptances for

a number of shares or a % of the shares in the relevant class or
of the shares in that class to which the offeror is not entitled*
unless that number or OO/ is specified in the offer; or

C) a condition that allows for a variation in the number or % so

specified.

4) A provision in an offer that contravenes subsection (3) is void.

Note. Origt'nal 20 (1) (a) and (b): merged to

avoid repetition.
Original 20 (1) and (2): merged to
express the link between them.
Plain English 6 (1): this may prohibit
minimum acceptance conditions as well as
maximum acceptance conditions. This rejlecs a
similar ambiguity in the original. The
Explanatory Memorandum (para 29) for the
Act which introduced this provision makes it
clear that the intention was only to cover
maximum acceptance conditions.
Original 16 (2) (h) (ii): unnecessary
qualifications.

See Schedule 2.
 Companies (Acquisition ofshares) (Victoria) Code

Take-over offers not to be subject to certain terms or conditions.

20. (1) An offeror shall not make a take-over offer that requires the
offeree to approve or consent to-
(a) a payment or other benefit being made or given to a director,
secretary or executive officer of the target company as
compensation for loss of, or as consideration for or in
connection with his retirement from, his office as director,
secretary or executive officer or any other office in connection
with the management of the target company or of a corporation
that is related to the target company; or
(b) a payment or other benefit being made or given to a director,
secretary or executive officer of a corporation that is related to
the target company as compensation for loss of, or as
consideration for or in connection with his retirement from,
his office as director, secretary or executive officer or any other
office in connection with the management of the target
company or of a corporation that is related to the target
company,
and any such requirement is void.
(2) An offeror shall not make a take-over offer subject to a prescribed
condition (however expressed) that the offeror receives an acceptance or
acceptances of an offer or offers under the relevant take-over scheme in
respect of a number of shares referred to in the take-over offer unless that
number of shares is specified in the take-over offer, and-
(a) any provision in the take-over offer by virtue of which the
number so specified may be varied is void; and
(6) if a take-over offer is made subject to a condition in
contravention of this sub-section, the condition is void.
(3) The number of shares specified in a take-over offer in accordance
with sub-section (2) may be expressed as a number of shares or as a
percentage of the total number of shares included in the class of shares to
which the take-over offer relates or of the total number of shares included
in that class of shares to which the offeror is not entitled.
Takeovers Code Section 7

7 What procedures must be followed?

1) Each offer* must be sent* in an approved manner.+

2) Between the 28th and 14th day before the offers are sent, the offeror*
must serve* on the target company*-

a) a Part A statement* that-

i) is signed by each offeror who is a natural person and by

at least 2 directors authorised by a resolution of the
directors, or by the sole director, of each corporation
that is an offeror; and

ii) contains a statement that a copy has been registered

with the Commission on a certain date but that the
Commission takes no responsibility for its contents;
and.

b) a copy of one of the proposed offers (which need not include

the name and address of the offeree, the date that the offer
will bear or any other date that is related to that date or the
particulars mentioned in paragraph 5 (1) (c)).

3) On the same day as the offeror serves the Part A statement, the offeror
must-

a) lodge with the Commission a notice that the Part A statement

has been served on the company under subsection (2); and

6) if the target company is a listed company*-serve on each

notifiable securities exchange* a copy of the documents so
served.

* See Schedule 2.
+ See 77 (2).
 . Companies (Acquisition of Shares) (Victoria) Code

16. [For the purposes of this Code, offers to acquire shares are made
under a takeover scheme if, and only if, the offers relate only to shares
included in a class of shares (in this section referred to as the 'relevant
class of shares') and-]
(2) (c) the offeror dispatches an offer in an approved manner to each
holder of shares in the target company (other than the offeror)
included in the relevant class of shares;
(d) the offeror has, not earlier than 28 days and not later than 14
days before the offers are dispatched, served on the target
company-
(i) a Part A statement relating to the offers that-
(A) is signed, where the offeror is, or includes, a natural
person or natural persons, by that person or by each
of those persons and, where the offeror is, or includes,
a corporation or corporations, by not less than 2
directors of the corporation, or by 2 directors of each
of those corporations, authorized so to sign pursuant
to a resolution passed at a meeting of the directors,
or, in the case of a corporation that has only one
director, by that director; and
(B) has endorsed on it a statement that a copy of the Part
A statement has been registered by the Commission
and that tKe Commission takes no responsibility as to
its contents and specifying the date on which the
copy was so registered; and
(ii) a copy of one of the proposed offers to which the Pan A
statement referred to in sub-paragraph (9 relates, being a
copy that need not include the name or address of the
offeree, the date that the offer will bear or any other date
that is related to or dependent upon that date or the
particulars referred to in sub-paragraph Cf) (iv);
(e) the offeror has, on the day on which the Part A statement is
served under paragraph (4-
(i) lodged with the Commission a notice in writing stating
that the Part A statement has been so served; and
(ii) if the target company is a listed company-served on each
notifiable securities exchange in relation to that company
a copy of each of the documents served on that company
in accordance with paragraph (d);
 Takeovers Code Section 7

4) On the day on which the last offer is sent, the offeror must-

a) serve a notice on the target company that the offers have been
sent and of their date; and

6) if the target company is a listed company-serve a copy of the

notice on each notifiable securities exchange; and

C) lodge a copy of the notice with the Commission.

5) The notice or copy must be accompanied by a copy of one of the offers

and of each accompanying document.

8 Part A statement and a copy of the offer must be registered with the
Commission

1) Before a person serves* a Part A statement* on a target company*, the

person must lodge with the Commission for registration-

a) a copy of the statement; and

b) a copy of one of the proposed offers* (which need not include

the name and address of the offeree, the date that the offer
will bear or any other date that is related to that date or the
particulars mentioned in paragraph 5 (1) (c)).

2) The Commission must register the copy of the Part A statement or the
copy of the proposed offer if-

a) it appears to the Commission to comply with the requirements

of this Code and the Commission is of opinion that it does not
contain materially false or misleading matter; and

b) the persons who made the reports that are set out in the
statement have signed consents to the inclusion of those reports
in the form and context in which they appear, and those
consents have been lodged with the Commission.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

Notice of offers to be served.

24. (1) Where take-over offers have been dispatched, the offeror shall, on
the day on which the last of the offers is dispatched-
(a) serve notice in writing o'n the target company that the offers
have been dispatched and of the date that they bear;
(6) if the target company is a listed company-serve a copy of the
notice on each notifiable securities exchange in relation to the
target company; and
(c) lodge a copy of the notice with the Commission.
(2) A notice or a copy of a notice referred to in sub-section (1) shall be
accompanied by a copy of one of the offers and a copy of every document
that accompanied that offer.

Registration of Part A statements and offers

18. (1) A person, or 2 or more persons together, shall not cause a Part A
statement to be served on a target company unless-
(a) a copy of that Part A statement; and
(b) a copy of one of the proposed offers to which that Part A
statement relates, being a copy that need not include-
(i) the name or address of the offeree;
(ii) the date that the offer will beat or any other date that is
related to or dependent upon that date; or
(iii) the particulars referred to in sub-paragraph 16 (2) ( f )
(iv),

(2) Where a copy of a Part A statement and a copy of a proposed offer

have been registered by the Commission not earlier than 21 days before
that Part A statement is served are lodged with the Commission for
registration under sub-section (1)) the Commission shall not register the
copy of the statement or the copy of the proposed offer unless-
(a) the statement and proposed offer appear to comply with the
requirements of this Code and the Commission is of the opinion
that the statement and the proposed offer do not contain any
matter that is false in a material particular or materially
misleading in the form or context in which it appears; and
(b) in respect of each report referred to in sub-section 16 (2A) that
is set out in the copy of the statement-there is lodged with
the Commission a notice in writing signed by the person or
persons by whom the report is made to the effect that the
person consents, or that each of those persons consents, to the
inclusion of the report in the statement in the form and context
in which it is included.
 3) The Commission may refuse to register the copy of the proposed offer
if it is subject to a defeating condition* that depends on-

a) an opinion, belief or other state of mind of the offeror*,or an

associate*; or

b) the occurrence of an event that is in the sole control of the

offeror or an associate.

Note. On'ginal 18 (2) (a): does not m a r

consistent with original 18 (24). In the plain
English version, 18 (2) (a) has been interpreted
to allow the statement w be registered without
the cqpy.
Original 18 (2A): introduction cwhere
...') contains unnecessary repetition from
previous subsection. Drafter should have relied
on clear link between the t w .
Plain English 8 (2): this expressly
obliges the Commission to register a Part A
statement and ofler if they conply with the Code.
That obligation is not expressed in the original,
but the better view is that it is implicit in it.

9 Service of a Part A statement

1) A person who wishes to proceed with a takeover scheme* must serve*

the Part A statement* on the target company* within 21 days after it
is registered.

2) Service that does not comply with subsection (1) is ineffective, except
for the purposes of section 60.

Note. Original 18 (3) : unnecessary

qual$cation. How can 'other than this section'
be necessary or meaningful?

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

18. (2A) Where a copy of a Part A statement and a copy of a proposed

offer are lodged with the Commission for registration under sub-section
(I), the Commission may refuse to register the copy of the proposed offer
if the proposed offer is subject to a prescribed condition the fulfilment of
which depends on-
(a) an opinion, belief or other state of mind of the offeror or of a
person associated with the offeror; or
(b) whether or not a particular event happens, being an event that
is within the sole control of the offeror or of a person associated
with the offeror.

(1) [A person, or 2 or more persons together, shall not cause a Part A

statement to be served on a target company unless-]
(b) (iii) the particulars referred to in sub-paragraph 16 (2) Cn (iv),
have been registered by the Commission not earlier than 21 days before
that Part A statement is served.
(3) A Part A statement served on a target company in contravention of
this section shall, for the purposes of this Code other than this section and
section 44, be deemed not to have been served.
Takeovers Code Wction 10

Division 2-Part B Statements

10 Obligation on the target company to provide a Part B statement

1) A target company* must give*-

a) a Part B statement* to the offeror* not later than 14 days after

the Part A statement* is served*; or

6) a copy of the Part B statement to the offeror and to each person

who received an offer* to which the statement relates not later
than 14 days after the notice under subsection 7 (4) was served.

2) The Part B statement must be signed-

a) by all the directors, or by at least 2 directors authorised by a

resolution of the directors, or by the sole director; or

b) if the company is being wound up or is under official

management-by the liquidator or official manager.

3) On the day it gives the Part B statement, the target company must
lodge with the Commission a copy of the statement and of any
accompanying report or statement, and, if it is a listed company*, it
must also serve a copy of each document on each notifiable securities
exchange*.

4) If a report accompanies a Part B statement-the target company must

lodge with the Commission a notice signed by the author consenting
to the report accompanying the Part B statement.

Note. Original 22 (1): needless repetition in

the introduction-'Where a target company
receives ...'
Original 22 (2): needless repetition-
'directorsofthe target company'.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

Part B statement.
22. (1) Where a target company receives a Part A statement served under
paragraph 16 (2) (d), the target company shall-
(a) not later than 14 days after receipt of the Part A statement,
give a Part B statement to the offeror; or
(b) not later than 14 days after the receipt of a notice served
pursuant to sub-section 24 (1)-
(i) give a Part B statement to the offeror, and
(ii) give, or cause to be given, a copy of that statement to each
person to whom an offer to which the Part A statement
relates was made.

(2) The Part B statement shall-

(a) be signed by ail the directors of the target company or by not
less than 2 directors of the target company authorized so to
sign pursuant to a resolution passed at a meeting of the directors
or, in the case of a company that has only one director, by that
director; or
(b) if the company is in the course of being wound up or is under
official management-be signed by the liquidator or official
manager, as the case may be.
(4) A target company that gives a Part B statement under sub-section
(1) shall, on the day on which the Part B statement is given-
(a) if the company is a listed company-serve on each notifiable
securities in relation to the company a copy of the Part B
statement and of any report or statement accompanying the
Part B statement; and
(b) lodge with the Commission-
(i) a copy of the Part B statement and of any report or
statement accompanying the Part B statement; and
(ii) in respect of any report accompanying the Part B
statement-a notice in writing signed by the person or
persons by whom the report is made to the effect that the
person consents, or that each of those persons consents,
to the report accompanying the Part B statement.
Tskeovenr Code Section 11
- - -

11 Reference in a Part B statement to expert reports

1) A Part B statement* must not refer to an expert's report (other than a

report set out in a Part A statement* or one under section 12 unless-

a) it sets out the report; and

6) it, or an accompanying document, states that the expert

consents to its inclusion in the form and context in which it
appears.

2) In addition to the information referred to in Schedule 1, a Pan B

statement may contain any information (that is not materially false or
misleading that the directors or, if the company is being wound up or
is under official management, the liquidator or official manager think
fit.

12 Special requirements if the offeror is connected with the target company

a) is entitled* to at least 30% of a class* of the voting shares* in the target

company*; or

b) is or includes a natural person who is a director of the target company;

or

c) is or includes a corporation and a director of the target company is a

director of that corporation,

the Part B statement* must be accompanied by a copy of a report that

is obtained from an expert not associated* with the offeror or with the
target company and states with reasons whether the offers* are fair and
reasonable.

* See Schedule 2.

24
 Companies (Acquisition of Shares) (Victoria) Code

22. (3) A Part B statement shall not refer to any report made by an expert
(other than a report set out in the Part A statement or a report that
accompanies the Part B statement in accordance with section 23) unless-
(a) the report is set out in the Part B statement; and
(6) the Part B statement contains or is accompanied by a statement
that the person or each of the persons by whom the report is
made consents to the inclusion of the report in the form and
context in which it is included.

(5) A Part B statement may contain, in addition to the information

referred to in Part B of the Schedule, such information (not being
information that is false in a material particular or materially misleading
in the form or context in which it appears) as the directors of the target
company, or the liquidator or official manager, as the case may be, think
or thinks fit.

Offeror connected with target company

23. (1) Where-
(a) take-over offers are, or are to be, made in respect of shares in a
company by an offeror who has a prescribed shareholding in
the target c3mpany;
(b) take-over offers are, or are to be, made in respect of shares in a
company by an offeror that is or includes a natural person who
is a director of the target company; or
(c) take-over offers are, or are to be, made in respect of shares in a
company by an offeror that is or includes a corporation or
corporations, and a director or directors of the target company
is or are a director or directors of that corporation or of either
or any of those corporations,
the Part B statement given in accordance with sub-section 22 (1) shall be
accompanied by a copy of a report made by an expert (not being a person
who is associated with the offeror or with the target company) setting out
the particulars referred to in sub-section (lA), stating whether, in his
opinion, the take-over offers are fair and reasonable and setting out his
reasons for forming that opinion.
(3) For the purposes of sub-section (1)-
(a) a person has a prescribed shareholding in a company if he is
entitled to not less than 30% of the voting shares in the
company; and
(b) a person has a prescribed shareholding in a company, being a
company the voting shares in which are divided into 2 or more
classes of shares, if he is entitled to not less than 30% of the
shares in one of those classes.
 2 ) The report must set out-

a) the expert's relationship with the offeror, the target company

and any of their associates, including particulars of any
circumstances in which the expert advises or acts on behalf of
any of them in his or her professional capacity or business
relationship; and

b) any pecuniary or other interest that could reasonably be

regarded as capable of affecting the expert's ability to give an
unbiased report; and

c) any fee or other benefit, direct or indirect, that the expert has
received or may receive.in connection with making* the report.

3) If the target company obtains more than one repott, a copy of each
report must accompany the Part B statement.

4) A report which contains-

a) a profit forecast*; or

b) a statement concerning the value of assets,

to which subsection 51 (1) or 52 (1) would apply, if the forecast or

statement were made by the target company, does not satisfy the
requirements of subsection (1) and must not accompany the P a n B
statement except with the written consent of the Commission and in
accordance with any conditions that it specifies.

Note. Original 23 (3): creation of an

unnecessary concept-'prescribed share-
holding9-built into plain English version.
Unlike 11 (7), 23 (3) makes no provision for
amendment of the % by regulation.
Original 23 (3) (a) and (b): failure to
integrate common material.

* See Schedule 2.

26
 Companies (Acquisition of Shares) (Victoria) Code

23. (1A) The particulars that are required by sub-section (1) to be set out
in a report made by an expert in relation to take-over offers are-
(a) particulars of any relationship of the expert with the offeror,
the target company or any person (in this paragraph referred
to as a "relevant associate") who is associated with the offeror
or the target company, including, without limiting the
generality of the foregoing, particulars of any circumstances
in which the expert furnishes advice to or acts on behalf of the
offeror, the target company or a relevant associate in the proper
performance of the functions attaching to the expert's
professional capacity or to the expert's business relationship
with the offeror, the target company or the relevant associate;
(6) particulars of any pecuniary or other interest of the expert that
could reasonably be regarded as being capable of affecting the
expert's ability to give an unbiased opinion in relation to the
take-over offers; and
(c) particulars of-
(i) any fee; and
(ii) any pecuniary or other benefit, whether direct or indirect,
that the expert has received or will or may receive for or
in connection with the making of the report.
(2) Where the target company obtains 2 or more reports each of which
could be used for the purposes of compliance with sub-section (I), the Part
B statement given by the company shall be accompanied by a copy of each
report.

(2A) Where-
(a) a target company obtains a report for the purposes of
compliance with sub-section (1); and
(6) the report contains a statement to which sub-section 37 (2) or
38 (2) would apply if the statement were to be made or issued
by the target company,
the report shall not be used for the purposes of compliance with sub-
section (I), and, notwithstanding sub-section (2), shall not accompany the
relevant Part B statement, except with the consent in writing of the
Commission and in accordance with such conditions (if any) as are specified
by the Commission.
 Takeovers Code Section 13

Division 3-Effect of Offers in Special Circumstances

13 What happens if someone else is entitled to the shares?

If, while an offer* remains unaccepted by an offeree in respect of any

shares*, a person (other than the offeror*) is, or is entitled* to be,
registered as the holder of some or all of those shares, then-

a) that offer lapses immediately in respect of those shares; and

b) the offeror is to be taken to make a corresponding offer-

i) to the other person in relation to those shares; and

ii) to the offeree in relation to the other shares covered by

the first mentioned offer.

Note. Original 25 (a) and (b): creation of

unnecessary concepts- 'original offer', 'relevant
shares', 'transferred shares'-built into plain
English version.
The reference in the original to
propmtional offersappears to be unnecessary.As
the section only applies if the first offeree has not
accepted at d l , then, under the plain English
version, the offer would automatically apply to
the same proportion of the transferee's shares as
the first offerapplied to the vendor's shares.

* See Schedule 2.

28
 Companies (Acquisition of Shares) (Victoria) Code

Acceptance of take-over offers by third parties

25. Where-
(a) a take-over offer (in this sub-section referred to as the "original
offer") relating to particular shares (in this sub-section referred
to as the "relevant shares") has been made to a person under a
take-over scheme under which take-over offers have been made
in accordance with sub-paragraph 16 (2) (a) (9;or
(b) a take-over offer (in this sub-section also referred to as the
"original offer") relating to a proportion of particular shares
(in this sub-section also referred to as the "relevant shares")
has been made to a person under a take-over scheme under
which take-over offers have been made in accordance with
sub-paragraph 16 (2) (a) (ii),
and another person was at the time when the original offer was made, or
becomes at any time during the period during which the original offer
remains open and before the original offer is accepted, the holder of, or
entitled to be registered as the holder of, shares (in this sub-section referred
to as the "transferred shares"), being some or all of the relevant shares, the
offeror shall be deemed-
(c) to have made at that time to the other person a corresponding
take-over offer relating to-
(i) in a case where paragraph (a) applies-the transferred
shares; or
(ii) in a case where paragraph (b) applies-that proportion of
the transferred shares;
(d) to have made at that time to the person referred to in paragraph
(a) or (b), as the case may be, a corresponding take-over offer
relating to-
(i) in a case where paragraph (a) applies-such (if any) of
the relevant shares as are shares other than the transferred
shares; or
(ii) in a case where paragraph (6) applies-that proportion of
such (if any) of the relevant shares as are shares other than
the transferred shares; and
(e) nothwithstanding section 21, to have withdrawn, immediately
after that time, the original offer.
Takeovers Code Section 14

14 What if the offeree holds the shares for someone else?

1) An offeree who holds shares* in different capacities (whether on his or

her own account, or as trustee or nominee for another person or
otherwise on account of some other person) may accept in respect of
shares held in one or more of those capacities, as if separate offers*
had been made* in respect of the shares held in each capacity, by
giving the offeror* a written notice specifying the total number of
shares held in one or more, but less than all, capacities in respect of
which the offeree accepts.

2) An offeree who gives* such a notice is to be taken to have received an

offer for the shares in respect of which an acceptance is given and the
original offer for all the offeree's shares lapses.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

Acceptance of take-over offers by trustees, nominees.

2SA. (1) Where-
(a) a take-over offer (in this sub-section referred to as the "original
offer") relating to particular shares (in this sub-section referred
to as the "relevant shares") included in a class of shares in a
company has been made to a person under a take-over scheme
under which take-over offers have been made in accordance
with sub-paragraph 16 (2) (a) (I); or
(b) a take-over offer (in this sub-section also referred to as the
"original offer") relating to a proportion of particular shares
(in this sub-section also referred to as the "relevant shares")
included in a class of shares in a company has been made to a
person under a take-over scheme under which take-over offers
have been made in accordance with sub-paragraph 16 (2) (a)
(ii),
the person may, at any time during the period during which the original
offer remains open and before the original offer is accepted, being a time
when the relevant shares consist of 2 or more distinct portions, give to the
offeror a notice in writing that-
(c) specifies a number (in this sub-section referred to as the
"specified number"), being the number of shares of which one
of those distinct portions consists, or being the total number of
shares of which 2 or more of those distinct portions together
consist; and
(d) states that the person accepts the original offer in so far as it
relates to-
(i) in a case where paragraph (a) applies-the specified
number of shares include in that class; or
(ii) in a case where paragraph (b) applies-that proportion of
the specified number of shares included in that class,
and if the person does so-
(e) the offeror shall be deemed to have made to the person
immediately before the notice is so given, a corresponding
take-over offer relating to-
(i) in a case where paragraph (a) applies-the specified
number of shares included in that class; or
(ii) in a case where paragraph (b) applies-that proportion of
the specified number of shares included in that class;
 W o n 14

3) If an offeree who is not entitled* to give a notice under subsection (1)

claims to do so, then-

a) subsection (1) applies as if the offeree were entitled to give the

notice; and

b) the offeree contravenes this subsection if the offeree knows

that he or she is not entitled to give the notice.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

25A.(1)( f ) the person shall be deemed to have accepted, upon the giving
of the notice, the corresponding take-over offer that the offeror
is, by virtue of paragraph (e), to be deemed to have made to the
person;
(g) notwithstanding section 21, the offeror shall be deemed to
have withdrawn immediately after the giving of the notice, the
original offer; and
(h) a corresponding take-over offer shall not, by reason only of the
offeror becoming, or becoming entitled to be registered as, the
holder of shares as a result of the operation of paragraph (n of
this sub-section, be deemed by virtue of paragraph 25 (d)to
have been made to the person.

(2) Where-
(a) a take-over offer has been made to a person;
(b) the person gives to the offeror, at a particular time during the
period during which the offer remains open and before the
offer is accepted, a notice (in this sub-section referred to as the
"relevant notice") that purports to be a notice under sub-
section (1) relating to the offer; and
(c) the person is not entitled under that sub-section so to give the
relevant notice,
then-
(4 in a case where the person so gives the relevant notice knowing
that the person is not so entitled-the person contravenes this
sub-section; and
(e) in any case-sub-section (1) has effect in relation to the relevant
notice as if the person has been so entitled.
(3) For the purposes of this section, where a person who holds particular
shares included in a class of shares in a company holds some, but not all,
of the first-mentioned shares on account of a particular person, such of the
first-mentioned shares as the first-mentioned person holds on account of
the particular person shall be taken to constitute a distinct portion of the
first-mentioned shares.
(4) For the purposes of this section, where a person holds particular
shares included in a class of shares in a company, such (if any) of the first-
mentioned shares as the person does not hold on account of a person shall
be taken to constitute a distinct portion of the first-mentioned shares.
Takeovers Code Section 14

4) A person who is entitled to be registered as the holder of particular

shares is taken to hold the shares.

5) A person who-

a) is entitled to be registered as the holder of particular shares;

and

b) holds his or her interest in the shares on account of some other

person,

is taken to hold the shares on account of the other person.

Note. Original 2 S A ( I ) : creation of

unnecessary concepts- 'original offer ', 'relevant
shares'- built into plain English version.
Original 25A ( I ) (e) (fl (h): heavy and
confusing cross-referencing- (e) refers to (a) and
(b); (fl refers to (e); and (h) refers to (fl and
(4.
Original 2SA(I) (h): dealt with in
plain English version in 13 where 'person' does
not include the offeror.
 Companies (Acquisition of Shares) /Victoria) Code

2SA. (5) For the purposes of this section-

(a) a person who is, or is entitled to be registered as, the holder of
particular shares shall be taken to hold the shares; and
(b) a person who-
(i) is entitled to be r~gisteredas the holder of particular
shares; and
(ii) holds the person's interest in the shares on account of a
particular person, shall be taken to hold the shares on
account of the particular person.
(6) For the purposes of this section, where a person holds shares, or
an interest in shares, as trustee for, as nominee for, or otherwise on behalf
of or on account of, a person, the first-mentioned person shall be taken to
hold the shares, or the interest in the shares, as the case may be, on account
of the second-mentioned person.
Takeovers Code Section 15

15 Effect of acceptance of a proportional offer

If the acceptance of an offer* relating to a proportion of an offeree's shares*

in a listed company* would result* in the offeree being left with an odd
lot* of shares (after excluding any marketable parcel of shares), the offer is
to be taken, except for the purposes of section 4 (2), to have covered that
odd lot of shares.

Note. Original 25B: unnecessary concepts-

'relevant offer', 'relevant shares'-built into
plain English version.
Original 25B(2): unnecessary
qualification.

16 Multipliers prevented

If an offeror* who has acquired* a proportion of a person's shares* by the

acceptance of an offer*, including an acceptance only in respect of shares
held in a particular capacity, makes* an offer (other than under section 13)
for any of the balance of the shares which that person held or is to be taken
to have held when the first offer was made, the offer is not made under the
takeover scheme*.

Note. Original 25C: an example of the

avoidance of a word ('multiplier') well
understood in the industry.

* See Schedule 2.

36
 Companies (Acquisition of Shares) (Victoria) Code

Avoidance of odd lots where take-over offer relates to proportion of

offeree's shares
2SB. (1) Where, at a particular time-
(a) a take-over offer (in this sub-section referred to as the "relevant
offer") relating to a proportion of particular shares (in this sub-
section referred to as the "relevant shares") included in a class
of shares in a company has been made to a person under a
take-over scheme under which take-over offers have been made
in accordance with sub-paragraph 16 (2) (a) (ii);
(6) the target company in relation to the take-over scheme is a
listed company;
(c) the relevant offer is accepted; and
(d) a proportion of the relevant shares, being the proportion to
which the relevant offer does not relate, consists of an odd lot
of shares or consists of a marketable parcel or marketable
parcels of shares and an odd lot of shares,
the relevant offer shall except for the purposes of sub-paragraph 16 (2) (a)
(ii) and this sub-section be deemed always to have related to, to relate to,
and to have been accepted in relation to, a number of shares included in
that class equal to the sum of-
(e) the number of shares of which the proportion referred to in
paragraph (a) of this sub-section consists; and
( f ) the number of shares in that odd lot of shares.
(2) Sub-section (1) of this section has effect notwithstanding section 25
or sub-section 25A(1).

Offeror not entitled to bid for balance where take-over offer relates to
proportion of offeree's shares
25C. Where a take-over offer (in this sub-section referred to as the
"relevant offer") relating to a proportion of particular shares (in this sub-
section referred to as the "relevant shares") has been made to a person
under a take-over scheme under which take-over offers have been made in
accordance with sub-paragraph 16 (2) (a) (ii), an offer (other than an offer
that the offeror is, by virtue of section 25 or sub-section 25A (I), to be
deemed to have made) that-
(a) was or is made by the offeror before, at or after the time when
the relevant offer was made;
(6) was or is made to that person or to any other person; and
(c) relates to shares that are or include some or all of such of the
relevant shares as are not shares to which the relevant offer
relates,
shall be taken to have been, or to be, as the case may be, made otherwise
than under the take-over scheme.
T8ke0ver~Code Section 17

Division 4-Withdrawal and Variation of Offers

17 Withdrawal of offers

An offeror* may withdraw an offer* only with the written consent of the
Commission and in accordance with any conditions it specifies.

18 In what circumstances may an offer be varied?

1) An offeror* may vary an offer* only-

a) with the written consent of the Commission and in accordance

with any conditions it specifies; or

b) in accordance with this Division; or

C) in accordance with the regulations.

2) An offeror may vary an offer under paragraph 1 (b) only if the offeror
varies all offers, other than offers that have already been accepted.

Note. Original 27 ( I ) (b): unnecessary

introduction concerning the type of regulation.

* see Schedule 2.
 Companies (Acquisition of Shares) (Vactoria) Code

Withdrawal of offers
21. A take-over offer is not capable of being withdrawn without the
consent in writing of the Commission, which may be given subject to such
conditions (if any) as are specified in the consent.

Variation of take-over offers

27. (1) An offeror may not vary a take-over offer without the consent in
writing of the Commission except-
(a) in accordance with the provisions of this section; or
(b) where the regulations permit, either unconditionally or subject
to conditions, variations of take-over offers or of a class of take-
over offers in which the take-over offer is included-in
accordance with the regulations.
(2) The Commission may consent to the variation of a take-over offer
either unconditionally or subject to such conditions as are specified in the
instrument of consent.
(3) Where an offeror varies an offer under a take-over scheme as
mentioned in paragraph (I) (a), he shall, at the same time, make a
corresponding variation to each other offer (other than an offer that has
been accepted before the variation is made) under the take-over scheme.
Takeovers Code W o n 19

19 Variation of consideration

1) An offeror* may vary the consideration specified in an offer*-

a) by increasing
i) the amount of a cash sum; or
ii) the number of shares*; or
iii) the amount of stock; or
iv) the rate of interest payable under debentures; or
V) the amount of debentures; or
vi) the number of unissued shares that may be acquired*
under an option; or

6) by adding a cash sum to shares, stock or debentures offered.

2) If an offer is accepted before a variation (including a second or

subsequent variation) under subsection (I), the contract is varied
accordingly and, if the consideration has already been received, the
offeree is entitled* to receive the additional consideration forthwith.

3) An offeror may vary an offer by offering consideration that consists

solely of a cash sum as an alternative to the consideration originally
offered. As soon as reasonably possible the offeror must give* an offeree
who has accepted the original offer written notice of the offeree's right
to elect to receive the cash sum by writing to the offeror within one
month after receiving the notice.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

27. (4)An offeror may vary an offer under a takeover scheme by doing one
or more of the following in relation to the whole or a part of the
consideration that is specified in the offer as the consideration for the
acquisition of the shares to which the offer relates:
(a) where a cash sum is so specified-by increasing the amount of
that sum;
(6) where shares are, stock is, or debentures are, so specified-by
specifying a cash sum in addition to the shares, stock or
debentures;
(c) where shares are so specified-by increasing the number of
those shares;
(4 where stock is so specified-by increasing the amount of that
stock;
(e) where debentures are so specified-by increasing the rate of
interest payable under those debentures;
( f ) where debentures are so specified-by increasing the amount
of those debentures;
(g) where an option to acquire unissued shares is so specified-by
varying that option so as to increase the number of unissued
shares that may be acquired under that option.
(5) Where the consideration specified in an offer under a take-over
scheme as the consideration for the acquisition of the shares to which the
offer relates is varied under sub-section (4)-
(a) if another offer under the take-over scheme has been accepted
before the variation, the contract resulting from the acceptance
of that other offer shall be deemed to be varied so that the
consideration under the contract is the consideration that would
have been specified in that other offer if a corresponding
variation had been made to that other offer before it was
accepted; and
(6) if the consideration under the contract referred to in paragraph
(a)has already been received, the offeree is entitled to receive
the additional consideration forthwith.
(6) An offeror may vary an offer under a take-over scheme in which
the consideration specified does not include a cash sum or does not consist
solely of a cash sum by offering as an alternative consideration to the
consideration specified in the offer a consideration that consists solely of a
cash sum.
Takeovers Code Section 19

4) An offeree who has already received the original consideration is

entitled to receive the cash sum when the offeror has received from
the offeree the original consideration (together with any necessary
documents of transfer) with the notice of election.

Note. Original 27 (5) (a): unnecessarily

convoluted language.

20 Variation of the offer period

1) An offeror* may vary an offer* by extending the offer period* up to a

total of 12 months.

2) T h e variation must be made-

a) in the case of offers subject to a defeating condition*-before

the publication of a notice under subsection 28 (1); and

b) in any other case-before the end of the offer period.

3) An offeror* may not vary an offer if the variation would be a breach of

a condition attached to the consent given* under section 17 to the
withdrawal of the offer.

Note. Original 27 (9): excessive caution.

* See Schedule 2,
 Companies (Acquisition of Shares) (Victoria) Code

22 (7) Where an offer under a take-over scheme is varied under sub-

section (6) so as to offer a cash sum as an alternative consideration and
another offer under the take-over scheme was accepted before the
variation-
(a) the contract resulting from the acceptance of that other offer
shall be deemed to be varied so as to confer on the person who
accepted that other offer the right, by notice in writing given
to the offeror within the time mentioned in paragraph (b),to
elect to accept the cash sum in lieu of the consideration that
was specified in that other offer;
(6) the offeror shall forthwith dispatch to the person who accepted
that other offer a notice in writing informing that person that
he may, within one month after receipt of the notice, give
notice in writing to the offeror stating that he elects to accept
the cash sum in lieu of the consideration that was specified in
that other offer; and
(c) if the consideration under the contract referred to in paragraph
(a) was received by the person who accepted that other offer
before he received the notice from the offeror under paragraph
(b) and that person gives notice to the offeror in accordance
with this sub-section electing to accept the cash sum in lieu of
the consideration that was specified in that other offer-that
person shall return the consideration (together with any
necessary documents of transfer) with the notice of election
and is entitled, upon receipt of the consideration by the offeror,
to receive the cash sum.
(8)An offeror may vary an offer under a take-over scheme-
(a) in the case of an offer that is subject to a prescribed condition-
before the publication of a notice pursuant to sub-section 28
(4) in relation to offers under the take-over scheme; or
(b) in the case of an offer to which paragraph (a)does not apply-
before the expiration of the period during which the offer
remains open,
by extending the period during which the offer remains open for a further
period but, subject to sub-section (1I), so that the total period during which
the offer remains open does not exceed 12 months.
(8A) Subsection (8) has effect in relation to a take-over scheme subject
to any condition specified in a consent under section 21 given in relation
to an offer made under the take-over scheme.
(9) The references in sub-section (8) to the period during which an
offer remains open shall, if that period has been extended pursuant to the
previous exercise on one or more occasions of the power conferred by that
sub-section, be construed as references to the period as so extended.
Takeovers Code S d o n 21

What must the offeror do to vary an offer?

1) To vary an offer*, the offeror* must serve* on the target company* a

notice-

a) signed in the same way as a Part A statement* must be signed;

and

b) setting out the terms of the proposed variation and particulars

of any necessary modifications of the statement; and

c) if the variation will postpone the offeror's obligations to provide

the consideration for a period exceeding one month-stating
the effect of subsection 23 (1)

The offeror must send a copy of the notice to each offeree in an

approved manner. +

2) To vary an offer under subsection 20 (1) in a way that takes the total
offer period* beyond 6 months, the offeror, during the 6th month that
commences after the offer was made*, must also-

a) serve on the target company a notice that is signed in the same

way as a Part A statement* must be signed and sets out any
differentinformation that the offeror would have been required
to include in the Part A statement if it had been lodged with
the Commission for registration 5 months after the date of the
offer; and

b) send* in an approved manner+ a copy of the notice to each

person to whom an offer was made; and

c) serve a copy of the notice on each notifiable securities

exchange* if the target company is a listed company*.

* See Schedule 2.
+ See 77 (2).
 Companies (Acquisition ofshares) (Victoria) Code

27. (10) Variations of offers under a take-over scheme shall be made by-
(a) serving on the target company a notice in writing-
(i) signed in the same manner as a Pan A statement is
required by paragraph 16 (2) ( 4 to be signed;
(ii) setting out the terms of the proposed variation and
particulars of such modifications of the relevant Pan A
statement as are necessary having regard to the variation;
and
(iii) in a case where the effect of the proposed variation will
be to postpone for a period exceeding one month the time
when the offeror's obligations under the take-over scheme
are to be satisfied-stating the effect of the provisions of
sub-section (12) of this section; and
(b) dispatching in an approved manner to each person to whom
an offer was made under the take-over scheme (including a
person who has accepted an offer so made) a copy of that
notice.
(11) Where an offeror purports, in accordance with sub-section (8), to
vary an offer under a take-over scheme that is open for a period not
exceeding 6 months so that the total period during which the offer would
remain open exceeds 6 months, the offeror shall, within the period of one
month commencing 5 months after the date that the offer bears-
(a) serve on the target company a notice in writing signed in the
same manner as a Part A statement is required by paragraph
16 (2) ( 4 to be signed and setting out any information that the
offeror would have been required to include in the relevant
Pan A statement if the statement had been lodged with the
Commission for registration 5 months after the date that the
offer bears, being information that differs from the information
included in that relevant Part A statement;
(b) dispatch in an approved manner to each person to whom an
offer under the take-over scheme was made (including a person
who had accepted an offer) a copy of that notice; and
Taktwvenr Code Section 21

3) An offeror may serve a notice under subsection 21 (1) or (2) only if the
Commission has registered it and it has on it-

@) a statement that the Commission has registered another copy

and the date of registration; and

6) a statement that the Commission takes no responsibility for

the contents of the notice.

In what circumstances may the Commission register a notice?

The Commission may register a notice lodged for registration only if-

a) in the case of a notice under subsection 21 (1)-it is of the

opinion that the proposed variation is permitted by this section;
and

b) in the case of a notice under subsection 21 (1) or (2)-the

notice appears to comply with the requirements of this Division
and the Commission is of the opinion that it does not contain
materially false or misleading matter.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code
-

27. (11) (c) if the target company is a listed company-serve on each

notifiable securities exchange in relation to that company a
copy of that notice.
(13) An offeror is not entitled to serve a notice under sub-section (10)
or (1 1) unless a copy of the notice has been registered by the Commission.
(15) A copy of a notice referred to in sub-section (10) or (11) shall,
when dispatched in accordance with paragraph (10) (6) or (11) (b), have
endorsed on it a statement that another copy of the notice has been
registered by the Commission and that the Commission takes no
responsibility as to the contents of the notice and specifying the date on
which that other copy was so registered.

(14) Where a copy of a notice is lodged with the Commission for

registration under sub-section (13), the Commission shall not register the
copy of the notice unless-
(a) in the case of a notice under sub-section (10)-the Commission
is of the opinion that the proposed variation is permitted by
this section; and
(6) in the case of a notice under sub-section (10) or (11)-the
notice appears to comply with the requirements of this section
and the Commission is of the opinion that the notice does not
contain any matter that is false in a material particular or
materially misleading in the form and context in which it
appears.
Takeovers Code Section 23

23 Effect on an offeror who has accepted an offer

1) If an offeree who has accepted an offer* that is subject to a defeating

condition* receives under subsection 21 (1) a copy of a notice of a
variation that would postpone the fulfilment of the offeror's* obligations
for a period exceeding one month, the offeree may withdraw his or her
acceptance by-

a> giving* the offeror written notice of the withdrawal within

one month after receiving the notice; and

b) returning any consideration received by the offeree, together

with any necessary documents of transfer.

2) Within 14 days after receiving the offeree's notice, the offeror must
return any document that the offeree sent* with the acceptance of the
offer.

Note. Original 27 (12): excessively long

sentence; separation of verb and adjunct- 'may
... withdraw'.

24 Validity of acquisitions when the variation of an offer contravenes Code

An acquisition* of shares* under an offer* that has been varied is not made
invalid merely because the offeror* has not varied the offer in a permissible
way.

Note. Original 27 (1 7): unnecessary

qualification.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

27. (12)Where an offeree who has accepted a take-over offer that is subject
to a prescribed condition receives a copy of a notice under sub-section (10)
in relation to a variation of offers under the relevant take-over scheme,
being a variation the effect of which is to postpone for a period exceeding
one month the time when the offeror's obligations under the take-over
scheme are to be satisfied, the offeree may, by notice in writing given to
the offeror within one month after receipt of the first-mentioned notice
and accompanied by any consideration that has been received by the
offeree (together with any necessary documents of transfer), withdraw his
acceptance of the offer and, where such a notice is given by the offeree to
the offeror and is accompanied by any such consideration and any necessary
documents of transfer, the offeror shall return to the offeree, within 14
days after receipt of the notice, any documents that were sent by the offeree
to the offeror with the acceptance of the offer.

(16)An acquisition of shares pursuant to a take-over offer is not invalid

by reason that-
(a) the offeror has purported to vary the take-over offer in
accordance with the requirements of this section but has
contravened or failed to comply with a requirement of this
section;
(6) the offeror has purported to vary the take-over offer in
accordance with the regulations but has contravened or failed
to comply with a requirement of the regulations; or
(c) the offeror has purported to vary the take-over offer with the
consent of the Commission given under sub-section ( 2 ) but
has contravened or failed to comply with a condition imposed
by the Commission under that sub-section.
(17) Nothing in this section affects the operation of section 19.
 Takeovers Code Section 25

25 Obligation to provide consideration unless time is varied

1) An offeror* must ensure that the consideration specified in an accepted

offer* is provided on time.

2) The Commission may extend the time for paying the consideration if
the offeror applies for an extension before the consideration is due.

Note. Original 19 (2): long-windedness- 'on

time' should sufice.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

Extension of time for paying consideration

19. (1) The Commission may, on application made by an offeror before
the time by which the consideration specified in the relevant take-over
offer is required by the terms of the offer to be paid or provided, fix a later
time as the time by which that consideration is to be paid or provided and,
where a later time is so fixed, the offer or, if the offer has been accepted,
the contract that resulted from the acceptance shall be deemed to be varied
accordingly.
(2) An offeror shall ensure that the consideration specified in the
relevant take-over offer is paid or provided not later than the time by which
that consideration is required by the terms of that take-over offer to be
paid or provided or, if a later time has been fixed under sub-section (I),
not later than the time so fixed.
Takeovers Code -
Section 26

Division 5-Offers and Contracts which

are Subject to Conditions
26 When may the offeror declare the offers and contracts unconditional?

An offeror* who makes* an offer* that is subject to a defeating condition*

must not declare, expressly or impliedly, in writing or by conduct, that the
offer or resulting contract is free from the condition or treat the offer or
resulting contract as being free from the condition unless the offeror-

a) complies with a term of the offer that he or she may do so not

less than 7 days before the end of the offer period;* and

b) at the same time declares all other offers and resulting contracts
to be free from the condition.

Note. Original 28 (1) and (2): unnecessary

repetition and circumlocution.

27 Procedure for giving notice of a declaration

An offeror*who declares an offer* or resulting contract free from a defeating

condition* must publish as soon as reasonably possible a notice-

a) stating that the offers are free from the condition; and

6) specifying the proportion of the relevant class* of shares* to

which the offeror knows that he or she is entitled*.

Note: Original 28 (3): in its context,

'fmhwith' can only mean as soon as
reasonably possible. The phrase 'at the
time of lodging the notice for
publicaion ' is unnecessary- it could
not be any other time.
* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

Declaration where bake-over offers are conditional

28. (1) Where an offeror makes a take-over offer that is subject to a
prescribed condition, the offeror may not, except in accordance with this
section, whether expressly or impliedly and whether in writing or by
conduct, declare the take-over offer or any contract resulting from the
acceptance of the take-over offer to be free from the condition, and may
not otherwise treat the take-over offer or any contract resulting from the
acceptance of the take-over offer as being free from the condition.
(2) Where an offer under a take-over scheme is subject to a prescribed
condition, the offeror may declare the offer to be free from the condition
if-
(a) it is a term of the offer that he may do so not less than 7 days
before the end of the period during which the offer remains
open and the offer is declared to be free from the condition in
accordance with that term; and
(b) at the same time he declares all other offers under the take-
over scheme, and all contracts formed by the acceptance of
offers under the take-over scheme, to be free from the condition.

(3) If an offeror declares all offers under a take-over scheme to be free

from a prescribed condition, he shall forthwith cause to be published a
notice stating that the offers are free from the condition and specifying the
proportion that the number of shares included in the class of shares to
which the offers related to which, to his knowledge, he is entitled at the
time of lodging the notice for publication bears to the number of shares
included in that class.
Takeovers Code Section 28

28 Notice concerning defeating conditions

1) The offeror* must publish on the date specified in the offers* or, if
that date has been extended, on the extended date, a notice stating
whether-

a) the offeror has declared the offers to be free from a defeating

condition*; or

b) the offers have become free from the condition under

subsection 30 (1); or

c> the offeror knows that the condition has been fulfilled.

2 ) If the notice states that the offers are free from the condition or that
the condition is fulfilled, it must also specify the proportion of the
relevant class* of shares to which the offeror knows that he or she is
entitled*.

3) A notice under section 27 or this section must be published in a

newspaper circulating generally in Victoria and in a newspaper
circulating in each other State or in a Territory in which the shares in
the target company* are listed.

4) If the target company is a listed companyf-on the first day on which

a notice is lodged for publication under section 27 or this section the
offeror must lodge a copy with the Commission and serve* a copy on
the home stock exchange*.

Note. Original 28 (6): unnecessary repetition.

Original 28 (10): stating the obvious
for no good reason.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code ..

28. ( 4 ) The offeror shall, whether or not he has caused a notice to be

published under sub-section (3), cause to be published on the prescribed
date a notice-
(a) stating whether he has declared the offers to be free from the
condition;
(b) stating whether the offers have become free from the condition
by reason of the operation of sub-section 30 ( 1 ) ; and
(c) stating whether, to his knowledge, the condition was, at the
time of lodging the notice for publication, fulfilled.
(5) A reference in sub-section ( 4 ) to the prescribed date shall be
construed as a reference to-
(a) the date specified in the take-over offers in accordance with
sub-paragraph 16 (2) (n (v);or ,
(b) if the period for which the take-over offers are to remain open
has been extended as provided by section 27-the date that is
later than the date referred to in paragraph (a) by a period
equal to the period of the extension.
(6) Where a notice under sub-section ( 4 ) states that the offeror has
declared the offers to be, or that the offers have become, free from a
prescribed condition or that a prescribed condition has been fulfilled, the
notice shall also specify the proportion that the number of shares included
in the class of shares to which the offers related to which, to his knowledge,
he is entitled at the time of lodging the notice for publication bears to the
number of shares included in that class.

(7) A notice under sub-section ( 3 ) or (4) shall be published in a

newspaper circulating generally in Victoria and, if shares in the target
company are listed for quotation on the stock market of a stock exchange
in a State other than Victoria or in another Territory and that newspaper
does not circulate generally in that State or other Territory, in a newspaper
that does so circulate.
(8) Where a notice referred to in sub-section (3) or ( 4 ) is lodged for
publication, the offeror shall, on the first day on which the notice is lodged
for publication-
(a) lodge a copy of the notice with the Commissioners; and
(b) if the target company is a stock exchange listed company-
serve a copy of the notice on the stock exchange that is the
home exchange in relation to the target company.
(10) In this section, a reference to lodgment of a notice for publication
shall be construed as a reference to lodgment of the notice at an office of
the publisher of the newspaper in which the notice is proposed to be
published or at an office of an agent of the publisher of that newspaper.
Takeoven Code 29

29 What if the offers an not freed from a defeating condition?

If, at the end of the offer period*, the offers* have not been freed from a
defeating condition* and the condition has not been fulfilled, all acceptances
and resulting contracts are void.

Note. Original 28 (9): unnecessary repetitwn;

declaring 'acceptances' void is more succinct and
covers the ground adequately.

30 Effect of acceptances outside scheme on offers subject to certain conditions

1) If offers* for shares* are subject to a defeating condition* that the

offeror* receive acceptances for a specified number of shares and-

a) after the Pan A statement* was served* but before the end of
the offer period*, the offeror becomes entitled* to shares in
the same class* otherwise than as a result* of acceptances of
offers; and

b) those shares constitute more than 20% of the voting shares in

the company, excluding those to which the offeror was entitled
when the Pan A statement* was served,

the offers are freed from the condition.

2) If the offers are not freed from the condition, then, for the purpose of
determining whether the condition has been fulfilled, the offeror is to
be taken to have become entitled to the shares as a result of receiving
acceptances of offers.

Note. Original 30 ( I ) (a) and (b) and 30 (2)

(a) and (6): failure to integrate common
material.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

28. (9) Where-

(a) offers made under a take-over scheme have at any time been
subject to a prescribed condition; and
(b) as at the time immediately after the end of the period during
which the offers remained open-
(i) the offeror has not declared the offers to be free from the
condition;
(ii) the offers have not become free from the condition by
virtue of the operation of sub-section 30 (1); and
(iii) the condition has not been fulfilled,
all contracts resulting from the acceptance of offers made under the take-
over scheme, and all such offers that have been accepted and from whose

Take-over offers subject to conditions

30. (1) Where-
(a) a take-over offer made in respect of shares in a company is
subject to a prescribed condition (however expressed) that the
offeror receives an acceptance or acceptances of an offer or
offers under the relevant take-over scheme in respect of a
number of shares referred to in the condition;
after the relevant ~ a ; tA statement was served on the target
company and before the expiration of the period during which
the offer remains open, the offeror becomes entitled to shares
in the company included in the same class as the first-
mentioned shares otherwise than as a result of the acceptance
of an offer under that take-over scheme; and
(c) the shares to which the offeror became entitled as mentioned
in paragraph (b) constitute, in the aggregate, more than 20%
of the voting shares in the company, other than shares to
which the offeror was entitled at the time when the Part A
statement was served,
the offer shall be deemed to be free from that condition.
(2) Where-
(a) a take-over offer made in respect of shares in a company is
subject to a prescribed condition (however expressed) that the
offeror receives an acceptance or acceptances of an offer or
offers under the relevant take-over scheme in respect of a
number of shares referred to in the condition;
(b) after the relevant Part A statement was served on the target
company and before the expiration of the period during which
the offer remains open, the offeror becomes entitled to shares
in the company included in the same class as the first-
mentioned shares otherwise than as a result of the acceptance
of an offer under that take-over scheme; and
(c) sub-section (1) does not operate to deem the offer to be free
from the condition,
then, for the purpose of determining whether the condition has been
fulfilled, the offeror shall be deemed to have become entitled to the shares
referred to in paragraph (b) as a result of receiving an acceptance or
acceptances of an offeror offers under that take-over scheme.
57
 Division 6-General
31 Offeree's entitlement if the offeror acquires shares outride the scheme

1) If, between the service of a Part A statement* and the end of the offer
period*, the offeror* acquires* shares* in the relevant class* otherwise
than by acceptance of an offer, then the following provisions apply.

2) If the consideration under the offer is, either exclusively or alternatively,

solely a cash amount, or if the consideration under a contract resulting*
from the acceptance of an offer is a cash amount and the purchase was
for a higher price per share-

a) the offer or contract is varied by substitution of the highest

price payable; and

b) if the offeree has already received a pan of the consideration-

he or she is entitled* to the additional amount forthwith.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

Meet of acquiring shares otherwise than under take-over scheme

31. (1) Where-
(a) a take-over offer is made in respect of shares in a company;
(6) the consideration payable under the offer consists solely of a
cash sum or includes alternative considerations one of which
consists solely of a cash sum;
(c) after the relevant Part A statement was served on the target
company and before the offer is accepted, the offeror purchased
or purchases shares in the company included in the same class
as the first-mentioned shares, otherwise than as a result of the
acceptance of an offer under the relevant take-over scheme,
for a consideration that consists solely of a cash sum; and
(d) the amount paid or payable for any of the shares referred to in
paragraph (c) is higher than the cash sum payable under the
offer for each share to which the offer relates,
the offer shall be deemed to be varied so that the cash sum payable for
each share to which the offer relates is an amount equal to the highest
amount paid or payable by the offeror for any of the shares referred to in
paragraph (c).
(2) Where-
(a) a take-over offer made in respect of shares in a company is
accepted;
(6) the consideration paid or payable under the contract resulting
from the acceptance of the offer consisted or consists solely of
a cash sum;
(c) after the acceptance of the offer and before the expiration of
the period in which the offer, if it had not been accepted,
would have remained open, the offeror purchases shares in the
company,included in the same class as the first-mentioned
shares, otherwise than as a result of the acceptance of an offer
under the relevant take-over scheme, for a consideration that
consists solely of a cash sum; and
(d) the amount paid or payable for any of the shares referred to in
paragraph (c) is higher than the consideration paid or payable
for each share under the contract referred to in paragraph (b),
that contract shall be deemed to be varied so that the consideration payable
for each share under the contract is an amount equal to the highest amount
paid or payable by the offeror for any of the shares referred to in paragraph
(c) and, if the offeree has already received the whole or any pan of the
consideration under the contract, he is entitled to receive forthwith the
additional consideration resulting from the variation.
 3) If the consideration under the contract resulting from the acceptance
of an offer-

a) is solely a cash amount and the contract requires the offeree

to lend the whole or a pan of that amount to the offerdr or to
some other person, and the consideration for the acquisition
of the other shares consists solely of a cash amount but the
contract does not contain such a requirement; or

b) is not solely a cash amount but the consideration for the

purchase of the other shares is,

the offeror must give each offeree within 14 days &er the end of the
offer period a notice of-

c) the highest amount payable for any of the shares; and

d) the offeree's option to receive that amount by writing given to

the offeror within 28 days after receiving the notice.

4) If an offeree chooses the highest amount under subsection (3)-

a) the offeree is entitled to it, free of any lending requirement,

but he or she must return to the offeror any consideration
received, together with any necessary documents of transfer
and any document showing that the whole or a part of the
consideration was lent to the offeror or to some other person;
and

b) the debt arising from the loan is discharged.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

31. (4) Where-

(a) a take-over offer made in respect of shares in a company is
accepted;
(6) the consideration under the contract resulting from the
acceptance of the offer consists solely of a cash sum and it is a
term of the contract that the offeree makes, or that the sum is
applied in whole or in pan in making, a payment by way of a
deposit or loan; and
(c) after the relevant Part A statement was served on the target
company and before the expiration of the period in which the
offer, if it had not been accepted, would have remained open,
the offeror purchased or purchases shares in the company
included in the same class as the first-mentioned shares,
otherwise than as a result of the acceptance of an offer under
the relevant take-over scheme, for a consideration that consists
solely of a cash sum and the contract for the purchase of those
shares does not contain a term of the kind mentioned in
paragraph (b),
the offeror shall, within 14 days after the expiration of that period, give
notice in writing to the offeree setting out the highest price paid or payable
by the offeror for any of the shares referred to in paragraph (c) and
informing the offeree that he may; within 28 days after the receipt by him
of the notice, by writing given to the offeror, elect to receive for each share
in respect of which he has accepted the offer an amount equal to that price
in substitution for the consideration under the contract and, where such
an election is made-
(d) the contract referred to in paragraph (6) shall be deemed not
to have included the term referred to in that paragraph;
(e) the offeree is entitled to receive the substituted amount for
each share to which the contract relates and is entitled to
receive that amount forthwith;
the ogeree shall forthwith return to the offeror any
consideration that the offeree has received under the contract
(not including any consideration that has been applied, or an
amount equivalent to which has been applied, in making a
payment by way of deposit or loan in accordance with the term
referred to in paragraph (b)) and any document evidencing any
payment by way of a deposit or loan that the offeree has made
in accordance with that term; and
(g) upon the payment of the substituted amount to the offeree,
any debt due to the offeree arising out of any payment by way
of a deposit or loan in accordance with the term referred to in
paragraph (6) or arising out of the application of the
consideration under the contract is, by force of this paragraph,
discharged.
 5) If, under subsection (4) or a corresponding law*, the offeree returns
certificates and necessary documents of transfer in respect of shares
allotted as consideration for acceptance of the offer, the company*
may cancel the allotment.

Note. Original 31 (1) and (2): constant

repetition of common operative factors-minor
but vital differences not highlighted; failure to
integrate common material.
Original 31 (3) (c) and (4) (c):
excessive sentence length.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

31. (3) Where-

(a) a take-over offer made in respect of shares in a company is
accepted;
(b) the consideration paid or provided or to be paid or provided
under the contract resulting from the acceptance of the offer
does not consist solely of a cash sum;
(c) after the relevant Part A statement was served on the target
company and before the expiration of the period in which the
offer, if it had not been accepted, would have remained open,
the offeror purchased or purchases shares in the company
included in the same class as the first-mentioned shares,
otherwise than as a result of the acceptance of an offer under
the relevant take-over scheme, for a consideration that consists
solely of a cash sum,
the offeror shall, within 14 days after the expiration of that period, give
notice in writing to the offeree setting out the highest price paid or payable
by the offeror for any of the shares referred to in paragraph (c) and
informing the offeree that he may, within 28 days after the receipt by him
of the notice, by writing given to the offeror, elect to receive for each share
in respect of which he has accepted the offer an amount equal to that price
in substitution for the consideration under the contract and, where such
an election is made, the offeree is entitled to receive for each such share
the substituted amount and is entitled to receive that amount forthwith or,
if he has already received the whole or any part of the consideration under
the contract, forthwith upon returning that consideration (together with
any necessary documents of transfer) to the offeror.
(5) Where, in accordance with sub-section (3) or the provision of a law
of a participating State or a participating Territory that corresponds with
that sub-section, an offeree returns to a company any certificates (together
with any necessary documents of transfer) in respect of shares allotted by
that company as the consideration or part of the consideration for the
acquisition of shares in a corporation, the company may cancel the
allotment of those shares.
32 Voting requirements under m e t company's takeover approvalprovisions

1) This section applies in respect of a resolution provided for by the

constituent documents of a company* that contain takeover approval
provisions-

a) prohibiting the registration of a transfer under a contract

resulting* from the acceptance of an offer* relating to a
proportion of shares* unless the company passes a resolution
to approve the scheme; and

6) entitling* a person (other than the offeror* or an associate*)

to vote on the resolution if he or she held shares in the relevant
class* at the end of the day on which the first offer was made*;
and

c) specifying that the voting is to take place-

i) at a meeting of the persons entitled to vote, convened

and conducted by the company; or

ii) by means of a postal ballot conducted by the company

as set out in the provisions; or

iii) in whichever of those ways the directors determine;

and

d) specifying the proportion of the votes cast (not exceeding one-

half) that is required to pass the resolution.

See Schedule 2.
 Companies (Acquisition of Shares) (Vicwria) Cot&

Constituent documents of a company may require a resolution

approving certain acquisitions of shares in the company
31A. (1) In this section-
"relevant day" in relation to a take-over scheme, means the day that is 14
days before the end of the period during which the offers under the take-
over scheme remain open;
"take-over approval provisions", in relation to a company, means provisions
of the kind referred to in sub-section (2) that are contained in the constituent
documents of the company.
(2) Subject to this section and section 31B the constituent documents
of a company may contain provisions to the effect that, where offers have
been made under a take-over scheme in accordance with sub-paragraph
16 (2) (a) (ii) in respect of shares included in a class of shares in the
company (whether the first offer under the takeover scheme was made
before, at, or at any time after, the commencement of Part I1 of the
Companies and Securities Legislation Amendment Act 1986)-
(a) the registration of transfer giving effect to a contract resulting
from the acceptance of an offer made under the take-over
scheme is prohibited unless and until a resolution (in this sub-
section referred to as a "prescribed resolution") to approve the
take-over scheme is passed in accordance with the provisions;
(b) a person (other than the offeror or a person associated with the
offeror) who, as at the end of the day on which the first offer
under the take-over scheme was made, held shares included in
that class is entitled to vote on a prescribed resolution and, for
the purposes of so voting, is entitled to one vote for each of the
last-mentioned shares;

(c) a prescribed resolution shall be voted on in whichever of the

following ways is specified in the provisions:
(i) at a meeting, convened and conducted by the company,
of the persons entitled to vote on the resolution;
(ii) by means of a postal ballot conducted by the company in
accordance with a procedure set out in the provisions,
or, if the provisions so provide, in whichever of those ways is
determined by the directors of the company; and
(d) a piescribed resolution, being a resolution that has been voted
on, shall be taken to have been passed if the proportion that
the number of votes in favour of the resolution bears to the
total number of votes on the resolution is greater that such
proportion (not exceeding one-half) as is specified in the
provisions, and otherwise shall be taken to have been rejected.
 2) Each director must ensure that the company votes on the resolution at
least 14 days before the end of the offer period*.

3) A meeting to vote on a resolution is to be taken as a general meeting

of the company.

4) If a resolution has been voted on, then, by the 14th day before the end
of the offer period, the company must serve* a notice about the
resolution on-

a) the offeror*; and

6) if the company is a listed companyf--each notifiable*

securities exchange.

The notice mUM state that the resolution has been voted on and must
set out the result*.

5) If no resolution is voted on within 14 days before the end of the offer

period, a resolution to approve the scheme is to be taken to have been
passed.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

31A. (4) Where-

(a) take-over offers have been made under a take-over scheme in
accordance with sub-paragraph 16 (2) (a) (ii) (whether the first
offer under the take-over scheme was made before, at, or at
any time after, the commencement of Part I1 of the Companies
and Securities Legislation Amendment Act 1986); and
(b) the constituent documents of the target company in relation
to the take-over scheme contain take-over approval provisions,
then-
(c) the directors of the company shall ensure that a resolution to
approve the take-over scheme is voted on in accordance with
those provisions before the relevant day in relation to the take-
over scheme; and
(d) if the directors fail to ensure that such a resolution is so voted
on, each of the directors contravenes this sub-section.
(3) Except in so far as the constituent documents of a company otherwise
provide, the provisions (whether of a law or of the constituent documents,
or any other provisions) that apply in relation to a general meeting of the
company shall, with such modifications as the circumstances require,
apply in relation to a meeting that is convened pursuant to take-over
approval provisions of the company and shall so apply as if the last
mentioned meeting were a general meeting of the company.
(5) Where a resolution to approve a take-over scheme is voted on, in
accordance with take-over approval provisions of the target company in
relation to the take-over scheme, before the relevant day in relation to the
take-over scheme, the target company shall, on or before the relevant
day-
(a) give to the offeror; and
(b) in a case where the target company is a listed company-serve
on each notifiable securities exchange in relation to the target
company,
a notice in writing stating that a resolution to approve the take-over scheme
has been so voted on and that the resolution has been passed, or has been
rejected, as the case requires.
(6) Where, as at the end of the day before the relevant day in relation
to a take-over scheme under which offers have been made in accordance
with sub-paragraph 16 (2) (a) (ii)-
(a) the constituent documents of the target company in relation
to the take-over scheme contain take-over approval provisions;
and
(b) no resolution to approve the take-over scheme has been voted
on in accordance with those provisions,
a resolution to approve the take-over scheme shall, for the purposes of
those provisions, be deemed to have been passed in accordance with those
provisions.
TakeoversCode W o n 32

6 ) If a resolution is rejected, then-

a) all offers that have not led to binding contracts are withdrawn
at the end of the 14th day before the end of the offer period;
and

b) as soon as reasonably possible, the offeror must return any

document that an offeree sent* with an acceptance; and

C) the offeror must rescind each contract resulting from an

acceptance as soon as reasonably possible after the end of the
14th day before the end of the offer period; and

d) a person who has accepted an offer may rescind the contract.

7) This section applies notwithstanding anything in the business or listing

rules of a securities exchange*, in the constituent documents of the
company or in an agreement.

Note. Original 3JA: main idea buried in

middle of section-3 JA (4) (b)
Original 3JA: continuous repetition of
introductory material.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code . -

31A (7) Where-

(a) the constituent documents of a company contain take-over
approval provisions; and
(b) a resolution to approved a take-over scheme under which offers
. have been made in accordance with sub-paragraph 16 (2) (a)
(ii) is voted on, in accordance with those provisions, before the
relevant day in relation to the take-over scheme and is rejected,
then-
(c) notwithstanding section 21, all offers under the take-over
scheme that have not, as at the end of the relevant day, been
accepted, and all offers (in this sub-section referred to as the
"accepted offers") under the take-over scheme that have been
accepted and from whose acceptance binding contracts have
not, as at the end of the relevant day, resulted, shall be deemed
to be withdrawn at the end of the relevant day;
(4the offeror shall, forthwith after the end of the relevant day,
return to each person who has accepted any of the accepted
offers any documents that were sent by the person to the
offeror with the acceptance of the offer;
(e) the offeror is entitled to rescind, and shall, forthwith after the
end of the relevant day, rescind, each contract resulting from
the acceptance of an offer made under the take-over scheme;
and
(f) a person who has accepted an offer made under the take-over
scheme is entitled to rescind the contract (if any) resulting
from that acceptance.
(8) This section and section 31B have effect notwithstanding anything
contained in the business rules or listing rules of a securities exchange, in
the constituent documents of a company, or in any agreement.
 33 Insertion and removal of takeover approval provisions

1) Takeover approval provisions (including renewed provisions) referred

to in section 32 cease to have effectat the end of 3 years from the date
of their inclusion in the constituent document or their last renewal or,
if a shorter period is specified in the provisions, at the end of that
period, unless they are renewed sooner.

, * See Schedule 2.
 Companies (Acquisition ofshares) (Victoria) Codc

Provisions relating to the inclusion, effect and renewal of take-over

approval provisions
31B. ( 1 ) In this section-
"renew", in relation to take-over approval provisions of a company, means
renew under sub-section (3);
"requirements", in relation to a company, includes a requirement of a law
or of the constituent documents of the company;
"take-over approval provisions", in relation to a company, means provisions
of the kind referred to in sub-section 31A (2) that are contained in the
constituent documents of the company.
(2) Take-over approval provisions of a company, unless sooner omitted
from the constituent documents of the company, cease to have effect at
the end of-
(a) unless paragraph (6)or (c) applies-3 years;
(b) if the constituent documents provide that the provisions have
effect for a specified period of less than 3 years and the
provisions have not been renewed-the specified period; or
(c) if the provisions have been renewed on at least one occasion
and the resolution, or the later or last of the resolutions, as the
case requires, renewing the provisions states that the provisions
are renewed for a specified period of less than 3 years-the
specified period,
commencing-
(d) if the provisions were contained in the constituent documents
at the time when the company was incorporated or formed
and have not been renewed-at that time;
(e) if the provisions were inserted in the constituent documents
and have not been renewed-at the time when the provisions were so
inserted; or
if the provisions have been renewed on at least one occasion-
at the time when the provisions were renewed, or last renewed,
as the case requires,
and, upon the provisions ceasing to have effect, the constituent documents
are, by force of this sub-section, altered by omitting the provisions.
(3)A company may renew take-over approval provisions of the company
in any manner in which the company may alter its constituent documents
by inserting such provisions and shall, in relation to a renewal of such
provisions, comply with the requirements that apply in relation to such an
alteration of its constituent documents, being an alteration in the manner
in which the renewal is effected.
 2) With each notice of a resolution to insert or renew provisions relating
to takeover approval provisions, the company* must send* to each
person who is entitled* to vote on the proposed resolution a statement
that:

a) explains the effect of the provisions; and

6) explains the reasons for the resolution and sets out the matters
and principles underlying those reasons; and

C) states whether any of the directors is aware that a person

proposes to acquire* or increase a substantial interest in the
company and, if so, explains the extent to which the proposal
has influenced the decision to propose the resolution; and

d) in the case of a resolution to renew provisions, sets out their

advantages and disadvantages for the directors and members
of the company during the period in which they
have operated; and

e) discusses the possible advantages and disadvantages of the

provisions for the directors and members of the company.

If a company contravenes this subsection, it and any officer of the

company who was knowingly concerned in the contravention ore each
guilty of an offence.

Penalty: A fine not exceeding $5000 or imprisonment for a period not

exceeding one year, or both.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victotia) CCode

3 1 8 (4) A company shall, with every notice that-

(a) specifies the intention to propose-
(i) a resolution for the alteration of the constituent documents
of the company by inserting take-over approval provisions;
or
(ii) a resolution to renew take-over approval provisions of the
company; and
(6) is sent to a person who is entitled to vote on the proposed
resolution,
send a statement that-
(c) explains the effect of the proposed provisions, or of the
provisions proposed to be renewed, as the case may be;
(d) explains the reasons for proposing the resolution and sets out
the factual matters and principles underlying those reasons;
(e) states whether, as at the day on which the statement is prepared,
any of the directors of the company is aware of a
proposal by a person to acquire, or to increase the extent of, a
substantial interest in the company and, if so, explains the
extent (if any) to which such a proposal has influenced the
decision to propose the resolution;
( f ) in a case where sub-paragraph (a) (ii) applies-reviews both
the advantages, and disadvantages, of the provisions proposed
to be renewed for the directors, and the members, respectively,
of the company during the period during which the provisions
have been in effect; and
(g) discusses both the potential advantages, and the potential
disadvantages, of the proposed provisions, or of the provisions
proposed to be renewed, as the case may be, for the directors,
and the members, respectively, of the company.
(5) Where a company contravenes sub-section (4), the company and
any officer of the company who is in default are each guilty of an offence.
(6) The penalty for an offence arising under sub-section (5) is a fine
not exceeding $5,000 or imprisonment for a period not exceeding 1 year,
or both.
 3) If, on a particular day, a company inserts takeover approval provisions
in its constituent documents or renews them, then-

a) within 21 days, persons who together hold at least 10% of the

issued shares* in a class* of shares may apply to the Court to
have the insertion or renewal set aside; and

b) until the application is finally determined, the insertion or

renewal is to be taken* to have been valid.

4) The shareholders may appoint in writing one or more of their number

to apply on their behalf.

5) The Court may make an order setting aside the insertion or renewal
but otherwise must dismiss the application.

6) The company must lodge an office copy of the order with the
Commission within 14 days after the making of the order.

If a company contravenes this subsection, it and any officer of the

company who was knowingly concerned in the contravention are each
guilty of an offence.
Penalty: A fine not exceeding $2500 or imprisonment for a period not
exceeding 6 months, or both.

Note. Original 31B(l): creation of

unnecessary concepts- 'renew', 'requirements',
'takeover approval provisions'-built into plain
English version.
* See Schedule 2.
 Cmpaniw (Acquisition of Shares) (Viaoh) Cude

31B. (7) Where, on a particular day, a company purports to-

(a) alter its constituent documents by inserting take-over approval
provisions; or
(b) renew take-over approval provisions of the company,
then-
(c) the holders of not less in the aggregate than 10% of the issued
shares included in a class of shares in the company may, within
21 days after that day, apply to the Court to have the purported
alteration or renewal set aside; and
(d) unless and until an application made under paragraph (c) is
finally determined by the making of an order setting aside the
purported alteration or renewal, the company shall be deemed
for all purposes (other than the purposes of such an
application)-
(i) to have validly altered its constituent documents by
inserting the provisions referred to in paragraph (a); or
(ii) to have validly renewed the provision referred to in
paragraph (4
as the case may be.
(8) An application under paragraph (7) (c) may be made, on behalf of
the shareholders entitled to make the application, by such one or more of
their number as they appoint in writing.
(9) On an application under paragraph (7) (c), the Court may, if it is
satisfied that it is appropriate in all circumstances to do so, make an order
setting aside the purported alteration or renewal, but otherwise shall dismiss
the application.
(10) A company shall, within 14 days after the Court makes in relation
to the company an order of the kind referred to in sub-section (9), lodge
an office copy of the order with the Commission.
(11) Where a company contravenes sub-section (lo), the company and
any officer of the company who is in default are each guilty of an offence.
(12) The penalty for an offence arising under sub-section (11) is a fine
not exceeding $2,500 or imprisonment for a period not exceeding 6 months,
or both.
Takeovers Code -.
Ikction 34

-
PART 3 TAKEOVER ANNOUNCEMENTS
Division 1-Announcements and Part C Statements
34 In what circumstances may a takeover announcement be made?

1) A person may only make* offers*by way of a takeover announcement*

in relation to a class* of shares* in a listed company* if the provisions
of this Division that apply to the person who acquires* the shares are
complied with.
2) An intending offeror* may not make offers under an announcement
without the consent of the Commission if that person is entitled* to
30% of any class of the voting shares in the target company*.

35 What must a takeover announcement state?

An announcement must state that-

a> a member* of the home stock exchange* of the target

company* offers* to acquire* all shares* of the particular
class* on behalf of the offeror*; and

b) the offers are open for a month from the first trading day more
than 14 days after a takeover announcement*; and

C) the offers are to acquire shares at an official meeting of the

home stock exchange or, if the member or his representative
is absent or for some other reason offers cannot be accepted at
a particular official meeting, by notice in writing signed by a
holder of any of those shares and served* on that exchange on
the day of that meeting; and

d) the consideration is a specified cash price, which may not be

less than the highest price per share for which the offeror or
an associate* bought shares in the relevant class or agreed to
buy shares in the relevant class (excluding price escalations or
decreases provided for by the agreement) within 4 months
before the announcement is made.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victmia) Code

Take-over announcements
17. ( 1 ) Section 1 1 does not prohibit the acquisition of shares in a stock
exchange listed company if-
(a) the shares are acquired as a result of the acceptance of offers
made in accordance with this section;
(b) the requirements of this section that are applicable to the
person acquiring the shares are complied with.
(3)Except with the consent of the Commission, a person is not entitled,
or 2 or more persons together are not entitled, to make offers pursuant to
sub-section (2) in relation to shares in a company if that person, or either
or any of those persons-
(a) is entitled to not less than 30% of the voting shares in the
company; or
(b) in the case of a company the voting shares in which are divided
into 2 or more classes of shares-is entitled to not less than
30% of the shares in one of those classes.

(2)Subject to the following provisions of this section, a person, or 2 or

more persons together, may make offers to acquire shares in a stock
exchange listed company that are included in a class of shares by causing
an announcement to be to be made on his or their behalf by a member of
the stock exchange that is the home stock exchange in relation to that
company at an official meeting of that stock exchange to the effect that,
during the period of one month commencing on the first trading day after
the expiration of 14 days after the day on which the announcement is
made, the member offers, on behalf of that person or those persons, to
acquire, at a cash price per share specified in the announcement, all the
shares included in that class of shares in that company in respect of which
any such offers are accepted-
(a) at an official meeting of that stock exchange; or
(b) if the offers cannot be accepted at a particular meeting of that
stock exchange, whether by reason that the member of the
stock exchange by whom or on whose behalf the announcement
was made or his representative is not present at the meeting or
the committee of management, board of directors or other
governing authority of that stock exchange do not or does not
permit dealings in the shares at that meeting or otherwise-by
notice in writing signed by or on behalf of a holder of shares
to which the offers relate and served on that stock exchange
on the day on which that meeting is held.
(6) The price to be specified in an announcement made in accordance
with sub-section (2) on behalf of an on-market offeror in respect of a class
of shares in a company as the price per share at which shares will be
acquired shall, if the on-market offeror or a person associated with the on-
market offeror, in the 4 months immediately preceding the day of the
announcement, purchased or agreed to purchase shares in that company
included in that class of shares, be not less than the highest price per share
paid or agreed to be paid in respect of any of those shares pursuant to any
such purchase or agreement to purchase.
77
Takeovers Code Section 36

36 What procedures must be followed?

1) A takeover announcement* must be made* by or on behalf of a

member* of the home stock exchange* of the target company* at an
official meeting of that exchange.

2) T h e offeror* must-

a) on the day of the announcement-

i) serve* on the target company a Part C statement* signed

by each offeror who is a natural person, or by at least 2
directors authorised by a resolution of the directors, or
by the sole director; and

ii) serve a copy of the statement on the home stock

exchange of the company and lodge a copy with the
Commission; and

b) within 14 days after the announcement, send* a copy of the

statement to each shareholder concerned as approved+ by the
Commission.

3) In addition to the information referred to in Schedule 1, a Part C

statement may contain any information (that is not materially false or
misleading) that the offeror thinks fit.

* See Schedule 2.
+ See 77 (2).
 Companies (Acquisition of Shares) (Victoria) Code
-

17. (7) Where, in the 4 months immediately preceding the date of a take-
over announcement, the on-market offeror or a person associated with the
on-market offeror has entered into an agreement for the purchase of a
share or shares in the target company, being an agreement that provides
that the price payable for the share or any of the shares is a price (in this
sub-section referred to as the "original price") specified in the agreement
but may be varied in accordance with the terms of the agreement, then,
for the purposes of sub-section (6),the price agreed to be paid for the share
or any of the shares shall be deemed to be the original price.
(4) For the purposes of this section, an announcement made at an
official meeting of a stock exchange by a representative of a member of a
stock exchange shall be deemed to have been made by the member.
(10) An on-market offeror who makes offers constituted by a take-over
announcement in relation to shares in a company shall-
(a) on the day on which the announcement is made-
(i) serve on the target company a Part C statement relating
to the offers that is signed, where the on-market offeror
is, or includes, a natural person or natural persons, by that
person or by each of those persons and, where the on-
market offeror is, or includes, a corporation or
corporations, by not less than 2 directors of the corporation,
or by 2 directors of each of those corporations, authorized
so to sign pursuant to a resolution passed at a meeting of
the directors, or, in the case of a corporation that has only
one director, by that director;
(ii) serve a copy of the statement on the stock exchange that
is the home stock exchange in relation to the target
company; and
(iii) lodge a copy of the statement with the Commission; and
(b) withir~14 days after the day on which the announcement is
made, dispatch a copy of the statement in an approved manner
to each holder of shares included in the class of shares to which
the announcement relates.
(17) A Part C statement referred to in paragraph (10) (a) may contain,
in addition to the information referred to in Part C of the Schedule, such
information as the on-market offeror thinks fit, not being information that
is false in a material particular or materially misleading in the form or
context in which it appears.
 4) As soon as practicable, the stock exchange must notify the member
who made the announcement of a notice of acceptance served under
paragraph 35 (c)of this Code or under a corresponding law*.

Note. Original 17 (5): difJicult drafring-is

it the notice or the announcement, or both, that
is made 'pursuant to sub-section (2) or the
correspondingprovision ... '? Thefinal reference
to 'member of the stock exchange' appears to
indicate it is the notice.
Original 17 (10): persistent
unnecessary repetition to cover the plural.

37 Offeror may extend the offer period

1) An offeror* may extend the offer period* for further periods of one
month if-

a) the total period would not exceed 6 months; and

b) the extension is made* by a takeover announcement* made in

the same way as the original one and not later than the 6th
trading day before the end of the period.

2) On the day an announcement is made, the offeror must serve* a notice

of it on the home exchange* of the target company* and on the target
company and lodge a copy with the Commission.

Note. W@'nal17 (4): u n w s m y mjwts'tion

of information contained in m'pPnal(2) and
(12).

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

17, ( 5 ) Where a notice accepting an offer made by virtue of an

announcement made at a meeting of a stock exchange in Victoria by a
member of that stock exchange pursuant to sub-section (2) or the
corresponding provision of a law in force in another State or in a Territory
is served on the stock exchange in accordance with that sub-section or that
corresponding provision, the stock exchange shall as soon as practicable
notify that member of the stock exchange of the acceptance of the offer.

(12) An on-market offeror who has made offers constituted by a take-

over announcement in relation to shares in a company may cause an
announcement to be made on his behalf by a member of the stock exchange
that is referred to in sub-section (2) at an official meeting of that stock
exchange before the expiration of the sixth trading day before-
(a) the end of the period of one month referred to in that sub-
section; or
(b) if that period has been extended pursuant to the previous
exercise on one or more occasions of the power conferred by
this sub-section-the end of the extended period,
extending that period or that extended period, as the case may be, for a
further period of one month, but so that the total period for which the
offers remain open does not exceed 6 months.
(14)Subject to section 33, offers constituted by an announcement made
in accordance with sub-section (2) of this section remain open for the
period of one month referred to in that sub-section or, if that period has
been extended in accordance with sub-section (12) of this seation, for that
period as so extended.

(13) Where an on-market offeror causes an announcement to be made

pursuant to sub-section ( 1 1 ) or (12), the on-market offeror shall, on the
day on which the announcement is made-
(a) serve on the stock exchange at an official meeting of which
the announcement is made and on the target company; and
(b) lodge with the Commission,
a notice setting out the terms of the announcement.
Takeovers Code Stdon 31)

38 Effect of paying a higher price than offered

1) If, after a takeover announcement* is made*, but before the 5th trading
day before the end of the offer period*, the offeror* or an associate*
pays a higher price for a share* than that specified in the
announcement, the higher price is substituted for the price specified
in the announcement (or a lower price substituted for it under section
39) in relation to all subsequent acceptances.

2) From the 5th trading day before the end of the offer period until the
end of that period, the offeror must not acquire* shares in the same
class* at higher than the price specified in the announcement.

Note. Original 17 (8):creation of unnecessary

concept- 'relevant price'.

39 Effect of action by a target company that affects the value of shares

1) If, between a *takeover announcement and the end of the offer*

period*, the target company*-

a> allots or agrees to allot any shares;* or

b) grants or agrees to grant an option to subscribe for shares; or

C) issues* or agrees to issue convertible notes;* or

d) declares a dividend on any shares,

the offeror,* with the consent of the Commission, may substitute, by

an announcement made* by or on behalf of a member of the home
stock exchange* of the target company, a lower price for the one in
the offer or the one substituted for it under section 38.

2) On the day an announcement is made, the offeror must serve* a notice

of it on the home exchange of the target company and on the target
company and lodge a copy with the Commission.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

17. (8) Nothing in this section prohibits an on-market offeror from

acquiring in accordance with paragraph 13 (3) (b), during the period
commencing when the take-over announcement is made and ending at
the expiration of the sixth trading day before the expiration of the period
in which offers constituted by the take-over announcement remain open,
shares to which the relevant take-over announcement relates at a price (in
this sub-section referred to as a "relevant price") that is higher than the
price specified in the announcement or is higher than any price that is
deemed by a previous operation of this sub-section or of sub-section (11)
to be specified in the announcement but, if the on-market offeror acquires
shares at a relevant price during that period, that relevant price shall, for
the purposes of any offer that is accepted after the acquisition takes place,
be deemed to be the price specified in the announcement unless and until
another price is deemed by virtue of the operation of this sub-section or of
sub-section (1 1) to be specified in the announcement.
(9) An on-market offeror shall not, during the period commencing at
the end of the period referred to in sub-section (8) and ending at the
expiration of the period during which offers constituted by the take-over
announcement remain open, acquire shares to which the take-over
announcement relates at a price that is higher than the price that, at the
expiration of the period referred to in sub-section (a), is, or is deemed to
be, the price specified in the announcement.

(1 1) If, at any time after the making of a take-over announcement and

before the end of the period during which offers constituted by the take-
over announcement reniain open-
(a) the target company makes an allotment of, or grants an option
to subscribe for, any of its shares, or agrees to make such an
allotment or to grant such an option;
(b) the target company issues, or agrees to issue, convertible notes;
or
(c) the target company declares a dividend,
the on-market offeror may, with the consent of the Commission, cause an
announcement to be made on behalf of the on-market offeror by a member
of the stock exchange that is referred to in sub-section (2) at an official
meeting of that stock exchange stating that a specified lower price per
share is to be substituted for the price per share specified in the take-over
announcement and, where such announcement is made, that lower price
shall, unless and until a different price is deemed to be specified in the
take-over announcement by virtue of the operation of this sub-section or
of sub-section (a), be deemed to be the price specified in the take-over
announcement.
[(13) reproduced opposite plain English section 37 (2)).
Takeover8 Code Ssction40

40 Liability of members of a st& exchange

1) A member* of a stock exchange* who makes* a takeover

announcement* in Vicwria except as the agent of a member* of
another exchange is to be taken to have contracted as principal with a
person who (in any capacity) accepts the offer*.

2) If an announcement is made in Victoria on behalf of a member of

another exchange, that member is to be taken to have contracted as
principal with a person who (in any capacity) accepts the offer.

3) Liability as a principal in respect of a contract resulting* from the

acceptance of an offer is joint and individual between a member and
his or her partners in a business dealing in securities.

4) Nothing in this section affects the obligation between the member and
the offeror*.

* See Schedule 2.
 Companies (Acquisition of Shares) (Vicma) Code ~ -

17. (15) Where an offer to acquire shares in a company or other corporation

that is made by virtue of an announcement made at a meeting of a stock
exchange in Victoria by a member of that stock exchange in accordance
with sub-section (2) or the corresponding provision of a law of a State or
of another Territory is accepted-
(a) if the member is not acting as agent for a member of another
stock exchange-the member who made the announcement;
or
(b) if the member is acting as agent for a member of another stock
exchange-the member of that other stock exchange,
shall be deemed to have contracted as principal with the person who
(whether on his own behalf or on behalf of another person) accepted the
offer to acquire the shares to which the acceptance relates, but nothing in
this sub-section affects the rights and obligations between the member
who is so deemed to have contracted as principal and the on-market
offeror.

(16) Where, in respect of a contract that resulted from the acceptance

of an offer made by virtue of a take-bver announcement, a member of a
stock exchange who contracted, or is deemed by sub-section (15) to have
contracted, as principal with the person who accepted the offer was, at the
time when the contract was made, a partner in a partnership that carried
on a business of dealing in securities, any liabilities of the member arising
by reason of his so having contracted, or being deemed to have contracted,
as principal are joint and several liabilities of the persons who were the
partners in the partnership at that time.
Takeovers Code W o n 41

Division 2-Response of the Target Company:

Part D Statement
41 Obligation on a target company to provide a Part D statement

1) The target company* must serve* a *Part D statement* on its home

stsck exchange* within 14 days after a takeover announcement* if it
has received a statement that claims to be a Pan C statement* served
under subsection 36 (2).

2) The Part D statement must be signed-

a) by all the directors, or by at least 2 directors authorised by a

resolution of the directors, or by the sole director; or

b) if the company is being wound up or is under official

management-by the liquidator or official manager.

3) A Part D statement must not refer to an expert's report (other than a

report set out in the Part C statement) unless-

a) it sets out the report; and

b) it contains or is accompanied by a statement that expert

consents to its inclusion in the form and context in which it
appears.

4) On the day on which a target company serves the Part D statement, it

must lodge with the Commission and serve on the offeror* a copy of
the statement and of any accompanying statement.

5) In addition to the information contained in Schedule 1, a Part D

statement may contain information (that is not materially false or
misleading) that the directors, or, if the company is being wound up or
is under official management, the liquidator or official manager, thinks
fit.

* See Schedule 2.
 Companies (Acquisition
-
of Shares) (Victoria) Code

Part D statement
32. (1) Where a target company receives a statement that purports to be
a Part C statement served under sub-section 17 (lo), the target company
shall, not later than 14 days after the relevant take-over announcement
was made, serve a Part D statement on the stock exchange that is the home
stock exchange in relation to that company.

(2) The Part D statement shall-

(a) be signed by all the directors of the target company or by not
less than 2 directors of the target company authorized so to
sign pursuant to a resolution passed at a meeting of the directors
or, in the case of a company that has only one director, by that
director; or
(6) if the company is in the course of being wound up or is under
official management-be signed by the liquidator or official
manager, as the case may be.
(3) A Part D statement shall not refer to any report made by an expert
(other than a report set out in the Part C statement) unless-
(a) the report is set out in the Part D statement; and
(6) the Part D statement contains or is accompanied by a statement
that the person or each of the persons by whom the report is
made consents to the inclusion of the report in the form and
context in which it is included.

(4) A target company that serves a Part D statement under sub-section

(1) shall, on the day on which the Part D statement is served, lodge with
the Commission and give to the on-market offeror a copy of the Part D
statement and of any statement accompanying the Part D statement.
(5) A Part D statement may contain, in addition to the information
referred to in Part D of the Schedule, such information (not being
information that is false in a material particular or materially misleading
in the form or context in which it appears) as the directors of the target
company, or the liquidator or official manager, as the case may be, think
or thinks fit.
Takeovers Code Section 42

Division 3-Withdrawal and Suspension of Offers

42 When may the offeror withdraw the offers?

1) If a defined occurrence* takes place after a takeover announcement*

but before the end of the offer period*, the offeror* may withdraw
offers* that have not been accepted by having a member* of the target
company's* home stock exchange* announce the withdrawal at an
official meeting of that exchange.

2) If the offeror was entitled* to more than 50% of the voting shares* at
the time of the occurrence-an offeror may not withdraw offers because
of any of the defined occurrences* (a) to (g)in Schedule 2.

3) An offer that has not been accepted is withdrawn when-

a) the offeror or one of the offerors-

i) dies; or
ii) becomes bankrupt; or
iii) is declared by a court to be incapable of managing his
or her affairs; or
iv) is placed under official management; or
v) commences to be wound up; or
vi) becomes subject to a provisional liquidator.

* See Schedule 2.
 Cmponies (Acquisitimt of Shares) (Victoria) Cods

Withdrawal of on-market offers

33. (1) If, after the making of a take-over announcement in relation to
shares in a target company and before the end of the period in which offers
constituted by the take-over announcement remain open, a prescribed
occurrence takes place, the on-market offeror may, before the end of that
period, withdraw such of the offers as have not been accepted by causing
an announcement to that effect to be made on his behalf by a member of
the stock exchange that is referred to in sub-section 17 (2) at an official
meeting of that stock exchange.
(2) An on-market offeror is not entitled, by reason of any of the
occurrences referred to in paragraphs (a) to (g), inclusive, of the definition
of "prescribed occurrence" in section 6, to withdraw offers made by virtue
of a take-over announcement if, at the time of the relevant occurrence, the
on-market offeror was entitled to more than 50% of the voting shares in
the target company.

(3) If, after the making of a take-over announcement in relation to

shares in a company and before the end of the period in which offers
constituted by the take-over announcement remain open, being a take-
over announcement made on behalf of a natural person or on behalf of 2
or more persons at least one of whom is a natural person, that natural
person or, if there are 2 or more natural persons, either or any of them-
(a) dies;
(b) becomes bankrupt; or
(c) is declared by a court to be incapable of managing his affairs,
such of the offers made by virtue of the take-over announcement as have
not been accepted shall be deemed to have been withdrawn on the day on
which the person died, became bankrupt or was declared to be so incapable,
as the case may be.
 Takeovers Code Secth 42

b) the member of a stock exchange who made* the takeover

announcement otherwise than as agent for another member,
or the member of another stock exchange for whom the
member who made the announcement was acting as agent-

i) becomes bankrupt; or

ii) is directed by his or her stock exchange to cease carrying

on the business of dealing in securities; or

iii) if he or she is not a partner in a business of

dealing in securities, dies or is declared by a court to be
incapable of managing his or her affairs.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

33. (4) If, after the making of a take-over announcement in relation to

shares in a company and before the end of the period in which offers
constituted by the take-over announcement remain open, being a take-
over announcement made on behalf of a corporation or on behalf of 2 or
more persons at least one of whom is a corporation-
(a) that corporation or, if there are 2 or more corporations, either
or any of those corporations is placed under official
management;
(6) an order is made by a court for the winding up of that
corporation or, if there are 2 or more corporations, of either or
any of those corporations; or
(c) a provisional liquidator of that corporation, or, if there are 2 or
more corporations, of either or any of those corporations, is
appointed,
such of the offers made by virtue of the take-over announcement as have
not been accepted shall be deemed to have been withdrawn on the day on
which the corporation was placed under official management, the winding
up order was made or the provisional liquidator was appointed, as the case
may be.
(5) If, after the making of a take-over announcement by a member of a
stock exchange in relation to shares in a company and before the end of
the period in which offers constituted by the take-over announcement
remain open-
(a) where the member is not acting as agent for a member of
another stock exchange-the member who made the
announcement; or
(6) where the member is acting as agent for a member of another
stock exchange-the member of that other stock exchange,
becomes bankrupt, is directed by the committee of management, board of
directors or other governing authority of the stock exchange of which he
is a member of cease to carry on the business of dealing in securities or, in
the case of a member who carries on a business of dealing in securities
otherwise than as a partner in a partnership, dies or declared by a court to
be incapable of managing his affairs, such of the offers made by virtue of
the take-over announcement as have not been accepted shall be deemed to
have been withdrawn on the day on which the member became bankrupt,
was so directed to cease to carry on business, died or was so declared to be
incapable, as the case may be.
Takeovers Code W o n 42
- 2

4) With the consent of the Commission-

a) an offeror may withdraw those offers which have not been

accepted by having a member of the target company's home
stock exchange announce the withdrawal at an official meeting
of that exchange; or

b) the member of the stock exchange who made the

announcement on behalf of the offeror may withdraw those
offers which have not been accepted by announcing the
withdrawal at an official meeting of that exchange.

Note. Ora@'nal 33 (3) and (4): failure to

integrate common m a t e d .
Original 33 (3) (a)-(c): unneces-
sary repetitaim of qualifiations.
Ort'ginal 33 (6): words crfcer (b) add
nothing of subsrance as presumably the
Commission only gives wnsent if it thinks the
consent is just and equitable.

43 Commission's power to suspend offers

1) On the application of the offeror* or the member* of the home stock

exchange* who made* the announcement, the Commission may order
in writing that offers* may not be accepted while the order is in force.

2) The offer period* is extended accordingly.

Note. Original 34: ambiguity in relation to

the effect of the order resolved in the plain
English versio~.

* see Schedule 2.
 Companies (Acquisition of Shares) (VictmM) Code

33. (6) After the making of a take-over announcement and before the end
of the period in which offers constituted by the take-over announcement
remain open-
(a) the on-market offeror may, with the consent of the Commission,
withdraw such of the offers as have not been accepted by
causing an announcement to that effect to be made on his
behalf by a member of the stock exchange that is referred to in
sub-section 17 (2)at an official meeting of that stock exchange;
or
(b) the member of the stock exchange that is referred to in sub-
section 17 (2)who made the take-over announcement on behalf
of the on-market offeror may, with the consent of the
Commission, withdraw such of the offers as have not been
accepted by making an announcement to that effect at an
official meeting at that stock exchange,
but the Commission shall not grant its consent to such a withdrawal unless
it is satisfied that in all the circumstances it is just and equitable to permit
the withdrawal of the offers.

Suspension of acceptance of offers made pursuant to take-over

announcement
34. After the making of a take-over announcement and before the end of
the period in which offers constituted by the take-over announcement
remain open, the Commission may, on the application of the on-market
offeror or the member of the stock exchange that is referred to in sub-
section 17 (2) who made the take-over announcement on behalf of the on-
market offeror, by order in writing declare that such of the offers as have
been accepted are not capable of being accepted while the order is in force
but, where such an order is made, the period for which the offers remain
open shall be ascertained for the purposes of this Code as if the order had
not been made.
Takeovers Code Section 44

-
P A R T 4 P R O V I S I O N S A P P L Y I N G TO
BOTH SCHEMES A N D ANNOUNCEMENTS
Division 1-Obligations on Offerors and
on Certain Other Persons
44 Restriction on an offeror's right to dispose of shares

An offeror* must not dispose* of shares* in the class* covered by a takeover

scheme* or a takeover announcement*-

a) within 28 days after the Part A statement* is served*; or

b) if offers* are made* within that time or are sent* in accordance

with an order under section 64-during the offer period*; or

C) from the making of the announcement until the end of the

offer period,

unless, after the Part A statement was served or the takeover announcement
was made, a person who is not an associate* of the offeror has made offers
under a takeover scheme or by an announcement for shares in the same
class.

Note. Original 35 (1) and (2): failure to

integrate common material.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

Restriction on disposal of shares by offeror or on-market offeror

35. (1) During-
(a) the period commencing when a Part A statement is served on
the target company and ending at the expiration of 28 days
after the day on which the statement is served or, if take-over
offers are dispatched pursuant to the statement within those
28 days, at the expiration of the period during which the take-
over offers remain open; and
(b) if take-over offers are dispatched, in accordance with an order
under section 46, pursuant to the statement-the period during
which the take-over offers remain open,
the offeror shall not dispose of any shares in the target company included
in the same class of shares as the shares to which the Part A statement
relates unless another person (not being a person associated with the
offeror) has, after the Part A statement is served and before the disposal
takes place, made a take-over offer or caused a take-over announcement to
be made in respect of shares in the target company included in that class
of shares.
(2) After the making of a take-over announcement in relation to shares
in a company and before the end of the period in which offers constituted
by the take-over announcement remain open, the on-market offeror shall
not dispose of any shares in the target company included in the same class
of shares as the first-mentioned shares unless another person (not being a
person associated with the on-market offeror) has, after the making of the
announcement and before the disposal takes place, made a take-over offer
or caused a take-over announcement to be made in respect of shares in the
target company included in that class of shares.
45 NoMcation of acquisition and disposal of shares in a listed company

1) By 9.30am on the first tiading day after a Pan A statement* is served*

or offers* are sent* under section 64 or made* by a takeover
announcement*, the offeror* must serve on each notifiable securities
exchange* of a listed *target company*, a notice setting out whether,
since that time, the offeror has become entitled* or ceased to be entitled
to any voting shares* in the target company and, if so, the following
particulars:

a) the number and class* of those shares;

b) the consideration for the acquisition* or disposal* of each

share in the target company or in some other corporation as
the result* of which the offeror became entitled or ceased to
be entitled to those voting shares in the target company;

C) particulars of prescribed provisions in a contract by which the

person became entitled or ceased to be entitled to those shares;

d)
if the consideration for a share referred to in sub-paragraph
ii) was solely a cash amount, the highest amount payable
and the highest amount receivable in respect of such a
share;

8) any prescribed matters.

The notice must also set out the total number of voting shares in the
target company to which the offeror is entitled and the following
particulars:
f) the number of shares in each class;

k!) if known, the name of any other persons entitled to the shares
and a statement as to which of those persons has a relevant
interest* in the shares;

h) any prescribed matters.

See Schedule 2.

%
 Companies (Acquisition of Shares) (ViCt0t.i~)Code

Notification of acquisitions and disposals of shares

39. (1) For the purposes of the application of this section in relation to a
listed company-
(a) each of the following periods is a relevant period:
(i) if a Part A statement is served on the company-
(A) the period commencing when the statement is served
and ending at the expiration of 28 days after the day
on which the statement is served or, if take-over offers
are dispatched pursuant to the statement within those
28 days, at the expiration of the period during which
the take-over offers remain open; and
(B) if take-over offers are dispatched, in accordance with
an order under section 46, pursuant to the
statement-the period during which the take-over
offers remain open; and
(ii) if a take-over announcement is made in relation to shares
in the company-the period commencing when the
announcement is made and ending at the expiration of
the period during which offers constituted by that
announcement remain open; and
(6) a person is, at a relevant time, a prescribed person in relation
to a period that is, by reason of the service of a Part A statement
or the making of a take-over announcement, a relevant period
in relation to the company if-
(i) he is the person who is, or one of the persons who
constitute, the offeror under the take-over scheme to which
the Part A statement relates or is the person or one of the
persons who caused the takesver announcement to be
made; or
(ii) he is, at that time, entitled to more than the prescribed
percentage of the voting shares in the company and he is
not, and is not associated with, a person referred to in sub-
parakv-aph (9.
Takeovers Code -on 45

2) If-

a) within 28 days after a Part A statement is served; or

b) where offers are made within that time or are sent in

accordance with an order under section 64-within the offer
period*, or

c) after a takeover announcement* is made but before the end of

the offer period,

a person specified in the following table becomes entitled or ceases to

be entitled to voting shares in the target company, that person must, in
the specified circumstances, serve on each notifiable securities exchange
of the target company by 9.30am on the next trading day a notice
setting out the specified particulars:

[Table reproduced on following pages;

subsections (3)-(7) follow the table.]

See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code A

39. (2) person who, at the commencement of a period that is a relevant

period in relation to a listed company, is a prescribed person in relation to
that period by reason of sub-paragraph (1) (b) (a) shall-
(a) serve on each notifiable securities exchange in relation to the
company, before 9.30 a.m. on the next trading day of that
securities exchange after the date of commencement of that
period, a notice in writing setting out-
(i) whether he has become entitled or ceased to be entitled
to any voting shares in the company since the
commencement of that period and, if so, the prescribed
particulars of those shares; and
(ii) whether he is entitled to any voting shares in the company
at the time when the notice is served and, if so, the
prescribed particulars of those shares; and
(b) if, during that period, he becomes entitled or ceases to be
entitled to any voting shares in the company and has not
previously given a notice under this sub-section to each
notifiable securities exchange in relation to the company by
reason of his having become entitled or ceased to be entitled,
as the case may be, to those shares, serve on each notifiable
securities exchange, in relation to the company before 9.30
a.m. on the next trading day of that securities exchange after
the day on which he so became entitled or ceased to be entitled
to shares in the company, a notice in writing setting out-
(i) the prescribed particulars of those shares; and
(ii) if he is entitled to any voting shares in the company at the
time when the notice is served-the prescribed particulars
of those shares.
(3) A person who, during a period that is a relevant period in relation
to a listed company, becomes a prescribed person in relation to that period
by reason of sub-paragraph (1) (b) (ii) (whether or not the person had
previously been a prescribed person in relation to that period) shall serve
on each notifiable securities exchange in relation to the company, before
9.30 a.m. on the next trading day of that stock exchange after the day on
which he so became a prescribed person, a notice in writing setting out-
(a) the prescribed particulars of the voting shares in the company
to which he was entitled at the time when he so became a
prescribed person; and
(b) if he is entitled to any voting shares in the company at the time
when the notice is served-the prescribed particulars of those
shares.
 Companies (Acquisition of Shares) (Victoria) Code ,

39. (4) Where-

(a) during a period that is a relevant period in relation to a listed
company, a person who is a prescribed person in relation to
that period by reason of sub-paragraph (1) (b) (ii) ceases to be
entitled to voting shares in the company; and
(b) as a result of his so ceasing to be entitled to those shares he
ceases to be a prescribed person in relation to that period,
the person shall serve on each notifiable securities exchange in relation to
the company, before 9.30 a.m. on the next trading day of that securities
exchange after the day on which he ceased to be entitled to those shares, a
notice in writing setting out the prescribed particulars of those shares and
of any other voting shares in the company to which he became entitled or
ceased to be entitled since he last served a notice under this section in
relation to the company during that period or, if he has not previously
served a notice during that period, since the commencement of that period.
(5) Where-
(a) during a period that is a relevant period in relation to a listed
company, a person becomes entitled or ceases to be entitled to
voting shares in the company at a time when he is a prescribed
person in relation to that period by reason of sub-paragraph (1)
(4
(b) the number of voting shares in the company to which he is
entitled immediately after he becomes entitled or ceases to be
entitled to the first-mentioned shares-
(i) is greater or less than the number of voting shares in the
company to which he was entitled at the time when he
last served a notice under this section in relation to the
company during that period or, if he has not previously
served a notice during that period, the number of voting
shares in the company to which he was entitled at the
commencement of that period; and
(ii) is so greater or less by a number of voting shares that is
not less than the prescribed percentage of the voting shares
in the company; and
(c) the person has not ceased to be a prescribed person,
the person shall serve on each notifiable securities exchange in relation to
the company, before 9.30 a.m. on the next trading day of that securities
exchange after the day on which he became entitled or ceased to be
entitled to those first-mentioned shares, a notice in writing setting out-
(d) the prescribed particulars of those first-mentioned shares and
of any other voting shares in the company to which he became
entitled or ceased to be entitled since he last served a notice
under this section in relation to the company during that
period or, if he has not previously served a notice during that
period, since the commencement of that period; and
(e) if he is entitled to any voting shares in the company at the time
when the notice is given-the prescribed particulars of those
shares.
 Companies (Acquisition of Shares) (Victoria) Code .

39.(6) In a prosecution of a person for failing to serve a notice on a

securities exchange under this section, it is a defence if the defendant
establishes that-
(a) at the time when he was required to serve the notice he was
not aware of a fact or occurrence that gave rise to the
requirement; and
(b) he did not become aware of that fact or occurrence before the
expiration of the relevant period or, if he became so aware
before the expiration of that period, he served the nctice on
the next trading day of the securities exchange after he became
SO aware.

(7) A person is not required on any day to serve more than one notice
under this section in relation to the same company.
(8) Where each of 2 or more persons would, but for this sub-section, be
required to serve a notice under sub-section (5) in relation to the same
shares in a company by reason that each of them has become entitled or
each of them has ceased to be entitled to those shares, it is sufficient
compliance with that sub-section if one only of them serves the notice.
(9) The prescribed particulars in relation to shares in a company to
which a person is entitled (in this sub-section referred to as "relevant
shares") are-
(a) the relevant shares; .
(b) if shares in the company are divided into 2 or more classes-
the number of relevant shares in each class;
(c) if to the knowledge of the person another person is also entitled
to the relevant shares-the name of that other person and a
statement as to which of the persons entitled to the shares has
a relevant interest in the shares; and
( 4 such other matters (if any) as are prescribed.
(10) The prescribed particulars in relation to shares in a company to
which a person has become entitled (in this sub-section referred to as
"relevant shares") are-
(a) the number of relevant shares;
(b) the consideration (if any) for the acquisition of each share
(whether in the company or in another corporation) by virtue
of which the person became entitled to the relevant shares;
(c) if shares in the company are divided into 2 or more classes-
the number of relevant shares in each class;
( 4 if the person became entitled to the relevant shares by reason
of a contract that contained provisions of a prescribed kind-
particulars of those provisions; and
(e) such other matters (if any) as are prescribed.
Takeoven Code -
section
- 46

3) A lower Yo may be prescribed in place of a % specified in subsection

(2).
4) A person is not required to serve on a particular day more than one
notice in relation to the same company.
5) Where each of several persons is required to serve a notice in respect
of the same shares, it is sufficient compliance if one of them serves it.
6 ) A notice that specifies consideration in respect of 2 or more transactions
under which the consideration was solely a cash sum must specify the
highest sum payable and the highest sum receivable for any of the
shares.
7) It is a defence to a prosecution for failure to serve a notice if the
defendant proves that, when the notice should have been served, the
defendant was not aware of a fact or occurrence that gave rise to the
requirement and-
a) did not become aware of it within the relevant period; or
b) served the notice on the next trading day after becoming aware
of it.

Note. Original 39: seraous defccts in structure as the following comparative

table demonstrates-
Plain English Origagrnal

Table 1
Table 2
Table 3
Table 4
45 (3)
45
45 0
(y '

45 (6)
45 (7)

Original 39: also made virtually incomprehensible by crsation of a

seraes of unnecessary concepts- 'relevant period', 'relevant time', (prescra'bcd
person ,' 'pescn'bedparticulars '.
* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Cade ,

39. (11) The prescribed particulars in relation to shares in a company to

which a person has ceased to be entitled (in this sub-section referred to as
"relevant shares") are-
(a) the number of relevant shares;
(b) the consideration (if any) for the disposal of each share (whether
in the company or in another corporation) by virtue of which
the person ceased to be entitled to the relevant shares;
(c) if shares in the company are divided into 2 or more classes-
the number of relevant shares in each class;
(d) if the person ceased to be entitled to the relevant shares by
reason of a contract that contained provisions of a prescribed
kind-particulars of those provisions; and
(e) such other matters (if any) as are prescribed.

(12) A notice served under this section that specifies, in accordance

with paragraph (10) (6)or (11) (b), consideration for 2 or more acquisitions
of shares, 2 or more disposals of shares, or an acquisition or acquisitions of
shares and a disposal or disposals of shares, shall, if the consideration in
respect of 2 or more of the transactions consisted only of a cash sum, also
specify separately the higher or highest such sum paid or payable or
received or receivable for any of the shares referred to in that notice.
(13) A reference to the prescribed percentage is-
(a) in sub-paragraph (1) (b) (ii)-a reference to 5% or, where a
lesser percentage is prescribed by regulations in force for the
time being for the purposes of that sub-paragraph, a reference
to that lesser percentage; and
(b) in sub-paragraph (5) (b) (ii)-a reference to 1% or, where a
lesser percentage is prescribed by regulations in force for the
time being for the purposes of that sub-paragraph, a reference
to that lesser percentage.
Takeovers Code 8ecWn 46

46 Notification of acquisition of shares in an unlisted company

1) An offeror* for shares* in a target company* which is not a listed

company* must serve* a notice on the company if the offeror becomes
entitled* to 25%, 5096, 7590 or 90% of the voting shares in the
company-

a) within 28 days after a Part A statement* is served; or

6) if offers* are made* within that time or are sent in accordance

with an order under section 64--within the offer period*.

2) The notice must be served as soon as practicable within 2 business days

and must set out the percentak of the voting shares to which the
offeror is entitled.

3) Until the end of the offer period, the company must make the notice
available at its registered office for free inspection by a member of the
company during the hours when the office is open to the public.

Note. Ori&nal 39A: creation of unncussaty

concepts-‘company', 'pnsm'bcd m t a g e ' ,
'relevant period', 'rekwant person'-built into
plain English version.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code .
Notification of offeror's entitlement
39A. (1) In this section-
"company" does not include a listed company;
"prescribed percentage" means-
(a) 25%;
(b) 50%;
(c) 75%; or
(d) 90%;
"relevant period", in relation to a company, means-
(a) a period commencing when a Pan A statement is served on
the company and ending at the expiration of 28 days after the
day on which the statement is served or, if take-over offers are
dispatched pursuant to the statement within those 28 days, at
the expiration of the period during which the take-over offers
remain open; and
(b) if take-over offers are dispatched, in accordance with an order
under section 46, pursuant to a Pan A statement served on the
company-the period during which the takesver offers remain
open;
"relevant person", in relation to a relevant period in relation to a company,
means the person who is, or eachpf the persons who constitute, the offeror
in relation to the Part A statement concerned.
(2)Where-
(a) at a particular time during a period that is a relevant period in
relation to a company, the percentage of the voting shares in
the company to which a relevant person is entitled is less than
a prescribed percentage; and
(b) immediately after that time, the percentage of the voting shares
in the company to which the relevant person is entitled is equal
to or greater than that prescribed percentage,
the relevant person shall, as soon as practicable, and in any event within 2
business days, after that time, serve on the company a notice in writing
setting out the percentage of the voting shares in the company to which
the relevant person is entitled at the time when the notice is so served.
(3) Where a company receives a notice under sub-section (2), it shall
make the notice available at its registered office for inspection without
charge by any member of the company at any time during the remainder
of the relevant period in relation to the company, being a time at which
the registered office is open and accessible to the public.
47 Prohibition on additional benefits to persons who sell shares before offers
are made

1) An offeror* or an associate*, or a proposed offeror or associate, is guilty

of an offence if-

a) at a time-

i) when he or she proposes to make offers* or before,

during or after the end of the offer period*; and

ii) within 6 months after a person acquires* shares* in the

target company*;

he or she gives*, offers to give or agrees to give a benefit to or

receives or agrees to receive a benefit from a person who had
a relevant interest* in any of those shares immediately before
they were acquired*, or an associate of such a person; and

6) the benefit is attributable in whole or in part to the acquisition

of those shares; and

c> the amount or value of the benefit is determined in whole or

in part by reference to the amount or value of the consideration
for shares-

i) under the offers; or

ii) that the offeror acquires or proposes to acquire during

the offer period or under section 53 or 56.

2) An agreement or understanding of any kind is void, to the extent that

it provides for the doing of something which is an offence under
subsection (1).

* See Schedule 2.
 Companies (Acquisition of Shares) (Vicma) CCode ,

Persons s e h g shares before the making of take-over offers or of a take-

over announcement not to be given additional benefits in certain cases
39B. (1) Where-
(a) a person acquires shares included in a class of shares in a
company;
(b) within 6 months after the acquisition referred to in paragraph
(4-
(i) an offeror makes takeover offers under a takeover scheme;
or
(ii) an on-market offeror causes a take-over announcement to
be made,
in respect of shares included in that class;
(c) at a particular time, whether before, at or after the end of the
period (in this sub-section referred to as the "offer period")
during which the take-over offers, or offers constituted by the
take-over announcement, as the case may be, remain open, a
person (in this sub-section referred to as the "relevant person")
being the offeror or a person associated with the offeror, or
being the on-market offeror or a person associated with the on-
market offeror, as the case may be-
(i) gives, offers to give, or agrees to give, a benefit to; or
(ii) receives, or agrees to receive, a benefit from,
a person who had, immediately before the acquisition referred
to in paragraph (a), a relevant interest in any of the shares first
referred to in that paragraph, or a person who is associated
with a person who so had such a relevant interest;
(d) the giving or receiving of the benefit, the offer to give the
benefit, or the agreement to give or receive the benefit, as the
case may be, is attributed to matters including, the acquisition
referred to in paragraph (a); and
Takeovers Code section 47

Note. Original 39B: creution of u n ~ s a r y

e t s - 'ofler pct.iod', ' r e h n t person '-built
into plain English version.
Original 39B ( I ) and (2): extemely
long sentencesythe main clauses bcing lefi to the
very end in each case.
Original 39B(l) (c), (2) (c):
circumlocution and failure to integrate common
material-'a person ... being the o&mr m a
person associated with the of',m being the
on-market oflerm m a person associated with the
on-market o f l m ' .
Original 39B(4): unnecessary
dginition- 'ben&'. The word 'understanding'
would most probably cover d l the matters
included in the u n i t i o n of 'agremmt'. See
Adstcam Building Industries Pry Ltd v The
Queensland Cement and Lime Company Ltd
(1984) 2 ACLC 829,832, and the authorities
there rcfmed to.
 Companies (Acquisition of Shares) (Victoria) Code .

39B.(l)(e) the amount or value of the benefit was, or is to be, determined

by reference to, or by reference to matters including-
(i) in a case where sub-paragraph (b) ( I ] applies-the amount
or value of the consideration that, under an offer made
under the takeover scheme (including such an offer) as
varied, deemed to be varied or proposed to be varied), is
to be paid or provided for the acquisition of the shares to
which the offer relates;
(ii) in a case where sub-paragraph (6) (ii) applies-the price
per share specified, or deemed to be specified, in the take-
over announcement; or
(iii) the amount or value of the consideration for which the
offeror or on-market offeror acquires during the offer
period (whether or not as a result of the acceptance of an
offer made under the take-over scheme, or of an offer
constituted by the take-over announcement, as the case
may be), or pursuant to section 42 or 43, shares included
in that class, or for which the offeror or on-market offeror
proposes, offers, or proposes to offer, so to acquire such
shares,
the relevant person contravenes this sub-section.
(2) Where-
(a) a person acquires shares included in a class of shares in a
company;
(b) as at a particular time within 6 months after the acquisition
referred to in paragraph (a)-
(i) an offeror proposes to dispatch take-over offers under a
take-over scheme; or
(ii) an on-market offeror proposes to cause a take-over
announcement to be made,
in respect of shares included in that class;
(c) at the time referred to in paragraph (b), a person (in this sub-
section referred to as the "relevant person"), being the offeror
a person associated with the offeror, or being the on-market
offeror or a person associated with the on-market offeror, as
the case may be-
(i) gives, offers to give, or agrees to give a benefit to; or
(ii) receives, or agrees to receive, a benefit from,
a person who had, immediately before the acquisition referred
to in paragraph (a), a relevant interest in any of the shares first
referred to in that paragraph, or a person who is associated
with a person who so had such a relevant interest;
TakeoversCo& Section 47
 -Companies (Acquisition of Shares) (Victmra) Cade
.

39B.(2)(d) the giving or receiving of the benefit, the offer to give the
benefit, or the agreement to give or receive the benefit, as the
case may be, is attributable to, or is attributable to matters
including, the acquisition referred to in paragraph (a); and
(e) the amount or value of the benefit was, or is to be, determined
by reference to, or by reference to matters including-
(i) in a case where sub-paragraph (6) (i) applies-the amount
or value of the consideration that under an offer proposed
to be made under the take-over scheme, is to be paid or
provided for the acquisition of the shares to which the
offer relates;
(ii) in a case where sub-paragraph (6) (ii) applies-the price
per share proposed to be specified in the take-over
announcement; or
(iii) the amount or value of the consideration for which the
offeror or on-market offeror proposes to acquire shares
included in that class (whether or not as a result of the
acceptance of a proposed offer under the take-over scheme,
or of an offer constituted by the proposed takeover
announcement, as the case may be) during the period
during which the proposed take-over offers, or offers
constituted by the proposed take-over announce-
ment, as the case.may be, remaln open, or for which the
offeror or on-market offeror proposes to acquire such
shares pursuant to section 42 or 43,
the relevant person contravenes this sub-section.

(3) An agreement is void to the extent that it purports to provide for-

(a) a person to give, offer to give, or agree to give, a benefit to a
person; or
(6) a person to receive, or agree to receive, a benefit from a person,
in contravention of sub-section (1)or (2).
(4) In this section-
"agreement" means any agreement, arrangement or understanding-
(a) whether formal or informal or partly formal and partly
informal;
(6) whether written or oral or partly written and partly oral; and
(c) whether or not having legal or equitable force and whether or
not based on legal or equitable rights;
"benefit" means a benefit whether by way of payment of cash or
otherwise.
48 Prohibition on additional benefits to offerea or asrodrtca

1) An offeror* or an associate* must not give*, or offer* or agree to give,

to an offeree or an associate of an offeree a benefit not provided for
under the offers-

a) within 28 days after the Pan A statement* is served*; or

6) if offers are made* within that time-within the offer period*;

or

c) after the takeover announcement* is made until the end of the

offer period.

2) Subseetion (1) docs not prohibit an acquisition* of shares* in the

ordinary course of trading on the stock market of a stock exchange*
(except an acquisition that is special within the meaning of the *business
or listing rules* of the stock exchange to which it is reported).

Note. Otiginal 40 (1): unnecessary cross-

reference to 27,17; failure to integrate common
material.

See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

Offerees or on-market offerees not to be given benefits except under

take-over scheme or take-over announcement
40. (1) Subject to sub-section (3), during the period commencing when a
Part A statement is served on a target company and ending at the expiration
of 28 days after the day on which the statement is served or, if take-over
offers are dispatched pursuant to the statement within those 28 days, at the
expiration of the period during which the take-over offers remain open
the offeror, or a person associated with the offeror, shall not give, offer to
give or agree to give to a person whose shares may be acquired under the
relevant take-over scheme, or to a person associated with such a person,
any benefit (whether by payment of cash or otherwise) not provided for
under the takeover offers or, if the take-over offers are varied in accordance
with section 27, under the take-over offers as so varied.
(2) Subject to sub-section (3), during the period commencing when a
take-over announcement is made in relation to,shares in a company and
ending at the expiration of the period during which offers constituted by
that announcement remain open the on-market offeror, or a person
associated with the on-market offeror, shall not give, offer to give or agree
to give to a person whose shares may be acquired pursuant to the take-over
announcement, or to a person associated with such person, any benefit
(whether by payment of cash or otherwise) not provided for under the
terms of the take-over announcement or, if those terms have been varied
under section 17, under the terms asso varied.
(3) Nothing in this section prohibits-
(a) the variation of a take-over offer as provided by section 27; or
(b) the acquisition of shares in a company at an official meeting of
a stock exchange in the ordinary course of trading on the stock
market of that stock exchange.

8 (9) A reference in sub-section 13 (3) or 40 (3) to an acquisition of shares

in a company at an official meeting of a securities exchange in the ordinary
course of trading on the stock market of that securities exchange does not
include a reference to an acquisition of shares pursuant to a transaction
that, when it is reported to the relevant securities exchange, is, pursuant
to the business rules or listing rules of that securities exchange, described
as 'special'.
Takeover8 Code W o n 49

Division 2-Obligations on Target Company

49 What information must a target company provide?

1) If a Part A statement* or a Part C statement* has been served* on a

target company*, the offeror* may ask the company for a written
statement setting out as at the date of service-

a) the known names and addresses of the persons who held

shares*, renounceable options* or convertible notes*; and

6) particulars of the renounceable options that each person held

and the number of shares to which the options relate; and

c) particulars of the convertible notes that each person held and

the number of shares into which the notes may be converted.

2) The company must send* the statement to the offeror within 7 days
afier it receives the payment (not exceeding the prescribed amount)
that it requires for providing the statement.

50 Director's right to refund of expenses

A company* must refund to the directors the amount of expenses reasonably

incurred by them in the interests of the members of the company in relation
to a takeover scheme* or announcement* relating to shares* in the compiny.

* See Schedule 2.
 Companies (Acquisition ofshares) (Victoria) Code

Obligations of target company to provide information

36. Where a Pan A statement or a Pan C statement has been served on a
target company, the offeror or on-market offeror may request the company
to supply a written statement setting out-
(a) the names and addresses (so far as they are known to the
company) of the persons who, at the date of service of the Part
A statement or the Pan C statement, as the case may be, held
shares in, or renounceable options or convertible notes granted
or issued by, the company;
(6) in respect of each person who held shares-the number of
shares held;
(c) in respect of each person who held renounceable options-
particulars of the renounceable options and the number of
shares to which the options relate; and
(4 in respect of each person who held convertible notes-
particulars of the convertible notes and the number of shares
into which the notes may be converted,
and, where such a request is made and there is paid to the company such
amount (not exceeding the prescribed amount) as the company requires,
the company shall send the statement to the offeror or on-market offeror,
as the case may be, within 7 days after the day on which the payment is
received by the company.

Expenses of directors of target company

41. Notwithstanding anything in the constituent documents of a company,
the directors of the company are entitled to have refunded to them by the
company any expenses reasonably incurred by them in the interest of the
members of the company in relation to a take-over scheme involving the
acquisition of shares in the company or in relation to a take-over
announcement relating to shares in the company.
Takeovers Code Section 51

Division 3-Profit Forecasts and Asset Valuations

51 In what circumstances may a profit forecast be made?

1) If there is a proposal, or the directors of a target company* have reason

to believe that there is a proposal, to make offers* or if offers that have
been made have not been accepted-

a) a person who proposes to make* or has made the offers; or

b) an associate* of such a person; or

c> the target company; or

d) an associate of the target company or of an officer of the target

company; or

e) if the person or an associate mentioned in (a), (b) or (d) is a

corporation, an officer of that corporation or a person associated
with such an officer,

must not make a profit forecast* to the public or to a member of the

target company (except a statement made solely to the target company's
officers or advisers).,

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code a

Forecasts of profits
37. (1) Subject to this section, where-
(a) a person proposes, or 2 or more persons together propose, to
dispatch a take-over offer, or to cause a take-over announcement
to be made, in respect of shares in a company; or
(b) a person has, or 2 or more persons together have, dispatched a
take-over offer, or caused a take-over announcement to be
made, in respect of shares in a company and the period during
which the take-over offer remains open, or the offers constituted
by the take-over announcement remain open, has not expired,

the person, or either or any of those persons, or a person associated with

the person or with either or any of those persons, or, if the person or either
or any of those persons or any person associated with the person or with
either or any of those persons is a corporation, an officer of the corporation
or a person associated with such an officer, shall not make or issue, or
cause to be made or issued, any statement to the public or to all or any
members of the target company (including a statement included in a Part
A statement or a Part C statement but not including a statement made or
issued solely to officers of or advisers to the target company) that contains
a forecast in respect of the profits or profitability of the target company or,
if the person or either or any of those persons or any person associated
with the person or with either or any of those persons is a corporation, a
forecast in respect of the profits or profitability of that corporation.
(2) Subject to this section, where-
(a) the directors of a cornpany have reason to believe that a person
proposes, or 2 or more persons together propose, to dispatch a
take-over offer, or to cause a take-over announcement to be
made, in respect of shares in the company; or
(b) a person has, or 2 or more persons together have, dispatched a
take-over offer, or caused a take-over announcement to be
made, in respect of shares in a company and the period during
which the take-over offer remains open, or the offers constituted
by the take-over announcement remain open, has not expired,
the target company or a person associated with the target company or with
an officer of the target company, or, if a person associated with the target
company is a corporation, an officer of that corporation, or a person
associated with such an officer, shall not nake or issue, or cause to be
made or issued, any statement to the public or to all or any members of the
target company (including a statement included in a Part B statement or a
Part D statement but not including a statement made or issued solely to
officers of or advisers to the target company) that contains a forecast in
respect of the profits or profitability of the target company, or, if the person
or either or any of the persons referred to in paragraph (a) or (b) or any
person associated with the person or with either or any of those persons is
a corporation, a forecast in respect of the profits or profitability of that _
corporation.
Takeovers Code Section 51

2) Such a statement may nevertheless be made if it-

a) is contained in a report that accompanies a Part B statement*

with the written consent of the Commission under subsection
12 (4) and in accordance with conditions that it specifies; or

6) is in writing and made with the written consent of the

Commission and in accordance with conditions that it specifies.

Note. Original 37 (1) and (2): failure to

integrate common material.

52 In what circumstances may an assets valuation statement be made?

1) During-

a) the period that ends 28 days after a Part A statement* is

served*; 'or

6) if offers* are made* within that time or are sent* in accordance

with an order under section 64-the offer period*; or

c> the period from the serving of a Part C statement* until the
end of the offer period; or

d) the period in which the directors of a company* have reason

to believe that there is a proposal by any person to make offers
in relation to shares* in that company,

the target company, an associate* of it or of one of its officers, an

officer of an associated corporation, or an associate of such an officer
must not make a statement, or permit a statement to be made, to the
public or to any members of the company (except a statement made
solely to the company's officers or advisers) that the market value of an
asset of the company or of a related corporation differs from the value
shown for it in the most recent accounts published in accordance with
the law of the place of incorporation of the company or corporation.

* See Schedule 2.
 Companies (Acquisition of Shares) (Vicma) Code

37. (3) Nothing in sub-section (1) or (2) applies in relation to a statement

that-
(a) is in writing and is issued with the consent in writing of the
Commission and in accordance with such conditions (if any)
as are specified by the Commission; or
(6) is contained in a report that accompanies a Part B statement-
(i) with the consent in writing of the Commission given
under sub-section 23 (2A); and
(ii) in accordance with such conditions (if any) as are specified
by the Commission in the instrument by which that
consent is given.

Statements on asset valuations

38. (1) Subject to this section, where-
(a) a Part A statement has been served on a company in accordance
with paragraph 16 (2) ( 4 ;
(b) a Part C statement has.been served on a company in accordance
with paragraph 17 (10) (a); or
(c) the directors of a company otherwise have reason to believe
that a person proposes, or 2 or more persons together propose,
to make take-over offers, or cause a take-over announcement
to be made, in respect of shares in the company,
the following sub-sections of this section have effect-
( 4 in a case to which paragraph (a) applies-
(i) during the period commencing when the Pan A statement
was served and ending at the expiration of 28 days after
the day on which that statement was served or, if take-
over offers are dispatched pursuant to the statement within
those 28 days, at the expiration of the period during which
the take-over offers remain open; and
(ii) if take-over offers are dispatched, in accordance with an
order under section 46, pursuant to the Part A statement-
during the period during which the take-over offers remain
open;
(e) in a case to which paragraph (b) applies-until the end of the
period during which offers constituted by the take-over
announcement to which the Part C statement relates remain
open; or
(f) in a case to which paragraph (c) applies-during any period in
which the directors have reason to believe the matters
mentioned in that paragraph.
 Takeovers Code Section 52

2 ) Such a statement may nevertheless be made if it-

a) is contained in a report that accompanies a Part B statement*

with the written consent of the Commission under subsection
12 (4) and in accordance with conditions that it specifies; or

b) is in writing and made with the written consent of the

Commission and in accordance with any conditions that it
specifies; or

C) consists only of accounts and accompanying documents that

are required by law to be attached to the accounts and are-

i) laid before a company at an annual general meeting in

accordance with the Companies (Victoria) Code or a
previous corresponding law*; or

ii) laid before a corporation at an annual general meeting

in accordance with the law of the place of incorporation
of the corporation; or

iii) lodged in accordance with section 158 of the Compa:nies

(Victoria Code) or the corresponding provision of the
law of another State or of a Territory.

Note. Original 38 (3):creation of unnecessary

concepts- built into plain English version.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

38. (2) T h e target company or a person associated with the target company
or with an officer of the target company, or, if a person associated with the
target company is a corporation, an officer of that corporation, or a person
associated with such an officer, shall not make or issue, or cause or permit
to be made or issued, any statement to the public or to all or any members
of the target company (not being a statement made or issued solely to
officers of or advisers to the target company) to the effect that the market
value of an asset or assets of the target company or of a corporation that is
related to the target company differs from an amount at which the value
of the asset or assets is shown in the books of the target company or reiated
corporation unless the statement-
(a) is in writing and is issued with the consent in writing of the
Commission and in accordance with such conditions (if any)
as are specified by the Commission; or
(6) is contained in a report that accompanies a Part B statement-
(i) with the consent in writing of the Commission given
under sub-section 23 (2A); and
(ii) in accordance with such conditions (if any) as are specified
by the Commission in the instrument by which that
consent is given.
(3) A reference in sub-section (2) to an amount at which the value of
an asset of a company or other corporation is shown in the books of the
company or other corporation is a reference to an amount at which the
value of the asset of the company or other corporation is shown in the
most recently published accounts of the company or other corporation,
being accounts required to be prepared by the law of the place where the
company or other corporation is incorporated or formed.
(4) Nothing in sub-section (2) applies to or in relation to-
(a) any accounts made out and laid before-
(i) a company at an annual general meeting in accordance
with the Companies (Victoria) Code or a corresponding
previous law of Victoria; or
(ii) a corporation at an annual general meeting in accordance
with the law in force in the place where the corporation
is incorporated or formed that corresponds or
corresponded with the Companies (Victoria) Code or a
corresponding previous law of Victoria;
(6) any accounts made out and lodged with a person-
(i) in accordance with section 158 of the Companies (Victoria)
Code or a corresponding provision of a previous law of
Victoria; or
(ii) in accordance with a provision of a law in force in another
State or in a Territory that corresponds or corresponded
with a provision referred to in sub-paragraph (1); or
(c) any document attached to any such accounts in accordance
with the Companies (Victoria) Code or a previous
corresponding law of Victoria or a law in force in a place where
a corporation is incorporated or formed that is referred to in
sub-paragraph (a) (ii) or a provision referred to in sub-paragraph
(b) (ii).
 Takeovers Code Section 53

Division 4-Rights of Shareholders

53 Circumstances in which an offeror may acquire shares compulsorily

1) If, during the period between service of a Part A statement* or the

making* of a takeover announcement*, in relation to all the'shares*
in a class,* and the end of the offer period*-

a) the offeror* becomes entitled* to more than 90% of all the

shares in that class; and

b) where the offeror was entitled* to more than 10% of all the
shares in that class when the offers were made-three-quarters
of the offerees (who hold or held shares in that class to which,
when offers were first made, the offeror was not entitled) have
disposed* in any way of all their shares in that class to the
offeror,

the offeror may give to a shareholder who has not accepted the offer or
otherwise disposed or agreed to dispose of his or her shares to the
offeror a compulsory acquisition notice.

2) The offeror must give* the notice within one month after the end of
the offer period and must lodge with the Commission a copy of one of
the notices on the day that he or she first gives the notice.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

Provisions relating to dissenting shareholders

42. (1) For the purposes of this section-
(a) where take-over offers have been made under a take-over
scheme in accordance with sub-paragraph 16 (2) (a) (21, in
respect of shares included in a class of shares the shares in
respect of which the offers were made (other than shares to
which the offersr was entitled at the time when the first of the
offers was made) constitute shares subject to acquisition;
(b) where a take-over announcement has been made in respect of
shares included in a class of shares, the shares included in that
class (other than shares to which the on-market offeror is
entitled) constitute shares subject to acquisition;
(c) a reference to outstanding shares shall be construed as a
reference to-
(i) shares subject to acquisition by virtue of paragraph (a) in
respect of which a take-over offer was made but has not
been accepted, not being shares acquired by the offeror
otherwise than under the relevant take-over scheme; or
(ii) shares subject to acquisition by virtue of paragraph (6) in
respect of which an offer made by virtue of a take-over
announcement has not been accepted, not being shares
acquired by the on-market offeror otherwise than by virtue
of the take-over anhouncement; and
(4 a reference to a dissenting offeree shall be construed-
(i) in relation to shares in respect of which take-over offers
have been made-as a reference to a person who is the
holder of shares that are outstanding shares by virtue of
sub-paragraph (c) (I); and
(ii) in relation to shares in respect of which a take-over
announcement has been made-as a reference to a person
who is the holder of shares that are outstanding shares by
virtue of sub-paragraph (c) (ii).
(2) Where-
(a) take-over offers have been made under a take-over scheme in
accordance with sub-paragraph 16 (2) (a) (I) in respect of shares
included in a class of shares and, after the relevant Part A
statement was served on the target company and before the
end of the period during which the offers remain open, the
number of shares included in that class to which the offeror is
entitled became or becomes not less than 90% of the shares
included in that class; and
(b) if the shares subject to acquisition constitute less than 90% of
the shares included in that class-three-quarters of the offerees
have disposed of to the offeror (whether under the relevant
take-over scheme or otherwise) the shares subject to acquisition
that were held by them,
the offeror may, within one month after the last day upon which offers
under the take-over scheme remained open, give notice, as prescribed, to
a dissenting offeree to the effect that the offeror desires to acquire the
outstanding shares held by the dissenting offeree.
Takeovers Code Section 53

3) The giving of the notice binds the offeror to acquire the shares on the
latest terms applicable to the offer.

4) Two or more shareholders holding shares jointly are be taken to be one

offeree.

Note. , Original 42 (I): creation of unnecessary

concepts- 'shares subject to acquisition ',
'outstanding shares ', 'dissenting ofleree'- built
into plain English version.
Original 42 (2) and (3): Failure to
integrate common material.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

42(3) Where-
(a) a take-over announcement has been made in respect of shares
included in a class of shares and, before the end of the period
during which the offers constituted by that take-over
announcement remain open, the number of shares included
in that class to which the on-market offeror is entitled becomes
not less than 90% of the shares included in that class; and
(b) if the shares subject to acquisition constitute less than 90°/o of
the shares included in that class-three-quarters of the offerees
have disposed of to the on-market offeror (whether by
acceptance of offers made by virtue of the take-over
announcement or otherwise) the shares subject to acquisition
that were held by them,
the on-market offeror may, within one month after the last day upon which
offers constituted by the take-over announcement remained open, give
notice, as prescribed, to a dissenting offeree to the effect that the on-market
offeror desires to acquire the outstanding shares held by the dissenting
offeree.
(5) An offeror to whom sub-section (2) applies in relation to a particular
company shall, on the first day on which he gives a notice under sub-
section (2), in relation to that company, lodge with the commission a copy
of the notice or, if on that first day he'gives 2 or more notices under sub-
section (2) in relation to that company, a copy of any one of those notices.
(5A) An on-market offeror to whom sub-section (3) applies in relation
to a particular company shall, on the first day on which he gives a notice
under sub-section (3) in relation to that company, lodge with the
Commission a copy of that notice or, if on that first day he gives 2 or more
notices under sub-section (3) in relation to that company, a copy of any
one of those notices.
(6) Where a notice is given under sub-section (2) or (3), the offeror or
on-market offeror is entitled and bound, subject to this section, to acquire
the shares to which the notice relates on the terms that were applicable in
relation to the acquisition of shares under the take-over scheme or pursuant
to the take-over announcement immediately before the expiration of the
period for which offers under the take-over scheme or offers constituted
by the take-over announcement remained open.
(4) For the purposes of paragraph (2) (b) or (3) (b), 2 or more persons
holding jointly shares in respect of which a take-over offer has been made
or an offer has been made by virtue of a take-over announcement shall be
deemed to be one offeree.
Takeovers Code Section 54

54 Rights of shareholders who are sent a notice of compulsory acquisition

1) Within one month after a notice of compulsory acquisition is given*,

the shareholder may require a statement in writing of the names and
addresses of all other shareholders who have not disposed* or agreed
to dispose of their shares* to the offeror*. The offeror must give the
statement as soon as reasonably possible.

2) Within a month after receiving the notice or within 14 days after

receiving a statement under subsection (I), whichever is the later, a
shareholder-

a) may apply to the Court for an order that subsection 53 (3) does
not affect him or her; and

b) may conclusively specify in a written notice which of alternative

terms under an offer* applies to the acquisition* of his or her
shares.

3) If the shareholder fails to give the notice specifying a preferred term

and the Court makes no contrary order, the offeror may conclusively
choose between the alternative terms.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victorita) Code

42. (10) Where the offeror or on-market offeror has given notice under
sub-section (2) or (3), the dissenting offeree may, by notice in writing
served on the offeror or on-market offeror within one month after the date
on which the first-mentioned notice was given, ask for a statement in
writing of the names and addresses of all other dissenting offerees and the
offeror or on-market offeror shall forthwith give a statement in writing
accordingly.
(7) Sub-section (6) does not have effect in relation to a dissenting
offeree where, on an application made by the dissenting offeree-
(a) under sub-section (2) or (3); or within one month after the
date on which the notice was given
(b) within 14 days after the giving to him of a statement under
sub-section (lo),
whichever is the later, the Court orders that sub-section (6) is not to have
effect in relation to him.
(8) Where alternative terms were offered under a take-over offer to
which this section applies, the dissenting offeree may, by notice in writing
given to the offeror-
(a) within one month after the date on which the notice was given
under sub-section (2); or
(b) within 14 days after the giving to him of a statement under
sub-section (1O),
whichever is the later, specify which of those terms he prefers, and the
terms so specified shall apply to the acquisition of the outstanding shares
held by him.
(9) If a dissenting offeree fails to give a notice within the period allowed
by sub-section (8), the offeror may, unless the Court otherwise orders,
determine which of the terms referred to in that sub-section is to apply to
the acquisition of the outstanding shares of the dissenting offeree.
Takeovers Code Section 55

55 How to complete a compulsory acquisition

1) Within 14 days after the latest of-

a) one month after the notice under subsection 53 (1) was given*;

b) 14 days after the last statement under subsection 54 (1) was

given;

C) the disposal* of an application under paragraph 54 (2) (a),

the offeror* must serve* a copy of the notice on the target company*
together with a transfer completed by the offeror and by a person
appointed by the offeror to act on behalf of the shareholder, and must
provide the company* with the consideration for the transfer.

2) The company must-

a) register the transfer; and

0) hold in trust the consideration for the former shareholder and,

if it includes money, put the money into a separate bank
account; and

C) give the former shareholder written notice of the receipt of

the consideration and seek instructions; and

d) if the consideration is held for more than 2 years, transfer it

and any increase or substitute to the Minister administering
the Unclaimed Moneys Act 1962 before another 8 years have
elapsed.

* See Schedule 2.

130
 Companies (Acquisition of Shares) (Victm'a) Code

42. (11) Where the offeror or on-market offeror has given notice under
sub-section (2) or (3) and the Court has not, on an application made under
sub-section (7), ordered to the contrary, the offeror or on-market offeror
shall, within 14 days after-
(a) the expiration of one month after the notice was given;
(6) the expiration of 14 days after the last day on which a statement
under sub-section (10) was given; or
(c) where an application has been made to the Court under sub-
section (7)-the application has been disposed of,
whichever last happens, serve a copy of the notice on the company that
issued the shares, together with an instrument of transfer of the shares
executed on behalf of the holder of the shares by a person appointed by
the offeror or on-market offeror and also executed by the offeror or on-
market offeror, and pay, allot or transfer to the target company the
consideration for the transfer, and the target company shall thereupon
register the offeror or on-market offeror as the holder of those shares.

(12) The target company shall hold the consideration so received in

trust for the former holder of the shares and shall forthwith notify him in
writing that the consideration has been received by the target company
and is being held by that company pending his instructions as to how it is
to be dealt with.
(13) Where consideration held as provided by sub-section (12) consists
of or includes money, that money shall be paid into a bank account opened
and maintained for that purpose only.
(14) Where money or other property is held in trust by a company for
a person under this section and has been so held for not less than 2 years,
the company shall, before the expiration of 10 years after the date on
which the money or other property was received by the company, pay the
money or transfer the property and any accretions (or, if any property has
been substituted for the whole or any part of that money or property, the
property so substituted) to the Minister administering the Unclaimed
Moneys Act, 1962.
 3) The Minister may sell or realise property received under subsection 2)
as he thinks fit and must deal with the proceeds and any other
consideration in accordance with that Act.

4) If any of the property includes marketable securities, the Minister or,

if the property is transferred to an authority under a corresponding
law*, that authority, is not liable to do anything in respect of those
securities but the company's right to forfeit a share* is not affected.

5) Neither the State nor the Minister is liable for any loss that results*
from exercising or failing to exercise the powers the Minister has in
relation to the property.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Codf

42. (15) T h e Minister administering the Unclaimed Moneys Act, 1962,

shall sell or dispose of any property other than money so received and any
property that becomes substituted for the whole or any part of that property
as he thinks fit and shall deal with the proceeds of the sale or disposal and
any money so received and any income derived from that property in
accordance with that Act.
(16) Where any property transferred under this section to the Minister
administering the Unclaimed Moneys Act, 1962, or any property that
becomes substituted for the whole or any part of that property, includes
marketable securities of a corporation, that Minister is not subject to any
obligation to pay any calls, to make any contribution to the debts and
liabilities of the corporation, to discharge any other liability, or to do any
other act or thing, in respect of the marketable securities, whether the
obligation arises before or after the date of the transfer, but this sub-section
does not affect any right of the corporation to forfeit a share.
(17) Where, under the provisions of the law of a State or of another
Territory that corresponds with this section, marketable securities of a
company are transferred to any authority specified in that law, that authority
is not subject to any obligation as specified in sub-section (16) in respect of
those marketable securities, but this sub-section does not affect any right
of the company to forfeit a share.
(18) Neither the State nor the Minister administering the Unclaimed
Moneys Act, 1962, is liable for any loss or damage suffered by a person
arising out of the exercise of, or the failure to exercise, any of the powers
that are conferred on that Minister under this section or that that Minister
has in relation to property transferred to him under this section or property
that becomes substituted for the whole or any part of that property.
Takeovers Code Section 56

56 Rights of remaining shareholders

1) If an offeror* becomes entitled* to 90% of the shares* in the relevant

class*-

a) within 28 days after the Part A statement* is served*; or

b) if offers* are made* within that time-during the offer period*;

or

C) after the takeover announcement* but before the end of the

offer period,

the offeror must give*, as prescribed, a notice to that effect (together

with any prescribed information) within one month after the end of
the offer period to those holders of the remaining shares in the relevant
class* who have not been given notice of compulsory acquisition under
subsection 53 (1).

2) Within 3 months after the offeror's notice, a holder of remaining shares

may require the offeror by notice to acquire* them and, if alternative
terms were offered, may choose between them.

3) The effect of the holder's notice is to bind the offeror to acquire those
shares-
a) on the terms that applied immediately before the offers closed
and, if alternative terms applied, the shareholder's preferred
terms, or, if the shareholder has not stated his or her preference,
on whichever of the terms the offeror chooses; or

b) on any other terms that are agreed or on such terms as the

Court orders on the application of the offeror or shareholder.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

Rights of remaining shareholders and holders of options and notes.

43. (1) Where-
(a) a Part A statement has been served in respect of shares included
in a class of shares in a company and, during the period (in
this section referred to as a "relevant period") commencing
when the statement was served and ending at the expiration of
28 days after the day on which the statement was served or, if
take-over offers are dispatched pursuant to the statement within
those 28 days, at the expiration of the period during which the
take-over offers remain open, the number of shares included
in that class to which the offeror is entitled becomes not less
than 90°/o of the shares included in that class; or
(b) a take-over announcement has been made in respect of shares
included in a class of shares in a company and, during the
period (in this section also referred to as a "relevant period")
commencing when the take-over announcement was made
and ending at the expiration of the period during which the
offers constituted by the take-over announcement remain open,
the number of shares included in that class to which the on-
market offeror is entitled becomes not less than 90% of the
shares included in that class,
the offeror or on-market offeror shall, within one month after the last day
upon which offers under the relevant take-over scheme remained open or
offers constituted by the take-over announcement remained open, as the
case may be, give, as prescribed, a notice to the holders of remaining shares
included in that class who, when the notice is given, had not been given
notice under sub-section 42 (2) or (3) stating that he became entitled to
shares as mentioned in paragraph (a) or (b), as the case may be, and
containing such other information (if any) as is prescribed.
(2) A holder of remaining shares referred to in sub-section (1) may,
within 3 months after the giving of notice to him under that sub-section,
require the offeror or on-market offeror to acquire shares included in the
class concerned of which he is the holder and where, in the case of a take-
over offer, alternative terms were offered in respect of shares included in
that class in the take-over offer, elect which of those terms he will accept.
(3) Where a shareholder gives notice under sub-section (2) with respect
to his shares, the offeror or on-market offeror is entitled and bound to
acquire those shares-
(a) in the case where a Part A statement was served-on the terms
that were applicable in relation to the acquisition of shares
under the relevant take-over scheme immediately before the
expiration of the period for which offers under that take-over
scheme remained open and, where alternative terms were
applicable, on the terms for which the shareholder has elected
or, where he has not elected, on whichever of the terms the
offeror determines; or
TakeoversCode W o n MI

4) The afferor must lodge with the Commission a copy of a notice given
by the offeror as soon as reasonably possible after it is given.

57 Rights of holders of non-voting shares, options and notes

1) If an offeror* becomes entitled* to 90% of the voting shares* in a

company*-

a) within 28 days after the Part A statement* is served*; or

6) if offers* are made* within that time-within the offer period*

or

c> after the takeover announcement* but before the end of the
offer period,

the offeror must give*, as prescribed, a notice to that effect (together

with any prescribed information) within one month after the end of
the offer period to the holders of non-voting shares*, renounceable
options* and convertible notes* to which the offeror is not entitled.

2) The notice must not propose terms for the acquisition* by the offeror
of non-voting shares, renounceable options or convertible notes unless
it is accompanied by a report by an expert who is not an associate* of
the offeror or the target company*, stating with reasons whether the
proposed terms are fair and reasonable.

3) The report must also set out particulars of-

a) the expert's relationship with the offeror, the target company

and any of their associates, including particulars of any
circumstances in which the expert advises or acts on behalf of
any of them in his or her professional capacity or business
relationship; and

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

43. (3) (b) in the case where a take-over announcement was made-on
the terms that were applicable in relation to the acquisition of
shares pursuant to the take- over announcement immediately
before the expiration of the period for which offers constituted
by the take-over announcement remained open,
or on such other terms as are agreed or as the Court, on the application of
the offeror, on-market offeror or shareholder, thinks fit to order.

(7) Where an offeror or on-market offeror has given a notice or notices

under sub-section (1) or (4), he shall forthwith lodge with the Commission
a copy of the notice or of one of the notices.

(4) Where-
(a) a Part A statement has been served as mentioned in paragraph
(1) (a) and, during the relevant period referred to in that
paragraph, the number of voting shares in the company to
which the offeror is entitled becomes not less than 90% of the
voting shares in the company; or
(6) a take-over announcement has been made as mentioned in
paragraph (1) (b) and, during the relevant period referred to in
that paragraph, the number of voting shares in the company
to which the on-market offeror is entitled becomes not less
than 90% of the voting shares in the company,
the offeror or on-market offeror shall, within one month after the last day
upon which offers under the relevant take-over scheme remained open or
offers constituted by the take-over announcement remained open, as the
case may be, give, as prescribed, a notice to the holder of non-voting shares
to which he is not entitled, and to the holders of renounceable options or
convertible notes granted or issued by the company to which he is not
entitled, stating that he became entitled to shares as mentioned in paragraph
(a) or (b), as the case may be, and containing such other information (if
any) as is prescribed.
(5) A notice given under sub-section (4) shall not propose terms for the
acquisition by the offeror or on-market offeror of the shares, renounceable
option or convertible note to which the notice relates unless the notice is
accompanied by a copy of a report made by an expert (not being a person
who is associated with the offeror, the on-market offeror or the company
that issued the shares or granted or issued the renounceable option or the
convertible note) setting out the particulars referred to in sub-section (5B)
stating whether in his opinion, the terms proposed in the notice are fair
and reasonable and setting out his reasons for forming that opinion.
(5B)The particulars that are required by sub-section (5) to be set out
in a report made by an expert in relation to terms proposed by an offeror
or on-market offeror (in this sub-section referred to as the "relevant offeror")
for the acquisition of shares in, or renounceable options or convertible notes
granted or issued by, a company are-
 b) any pecuniary or other interest that could reasonably be
regarded as capable of affecting the expert's ability to give an
unbiased report; and

c) any fee or other benefit, direct or indirect, that the expeit has
received or may receive in connection with making the report.

4) If the offeror obtains more than one report, a copy of each report must
accompany the notice.

5) Within 3 months after the offeror's notice, the holder of the non-voting
shares, options or notes may require the offeror by notice to acquire
them.
6) The effect of the holder's notice is to bind the offeror to acquire
those shares, options or notes on such terms as are agreed or as the
Court orders on the application of the offeror or the holder.

7) The offeror must lodue with the Commirsion a copy of a notice given
by the offeror as soon as rearonably possible after it is given,

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code .

43. (a) particulars of any relationship of the expert with the relevant
offeror, the company or any person (in this paragraph referred
to as a "relevant associate") who is associated with the relevant
offeror or the company, including, without limiting the
generality of the foregoing, particulars of any circumstances
in which the expert furnishes advice to or acts on behalf of the
relevant offeror, the company or a relevant associate in the
proper performance of the functions attaching to the expert's
professional capacity or to the expert's business relationship
with the relevant offeror, the company or the relevant associate;
(b) particulars of any pecuniary or other interest of the expert that
could reasonably be regarded as being capable of affecting the
expert's ability to give an unbiased opinion in relation to the
proposed terms; and
(c) particulars of-
(i) any fee; and
(ii) any pecuniary or other benefit, whether direct or indirect,
that the expert has received or will or may receive for or in connection
with the making of the report.
(5A) Where an offeror or on-market offeror obtains 2 or more reports,
each of which could be used for the purposes of compliance with sub-
section (5), the notice given under sub-section (4) by the offeror or on-
market offeror, as the case may be, shall not propose terms for the
acquisition by the offeror or on-market offeror of the shares, renounceable
option or convertible note to which the notice relates unless the notice is
accompanied by a copy of each report.
(6) Where a notice is given under sub-section (4) to the holder of any
non-voting shares, renounceable option or convertible note-
(a) the holder of the shares, option or note may, within 3 months
after the giving of the notice to him, require the offeror or on-
market offeror to acquire the shares, option or note; and
(b) if a holder of shares or of an option or note so gives notice with
respect to the shares, option or note, the offeror or on-market
offeror is entitled and bound to acquire those shares or that
option or note on such terms as are agreed or as the Court, on
the application of the offeror, on- market offeror or holder of
the shares, option or note, thinks fit to order.

(7) [reproduced opposite plain English section 56 (4).]

Takeover8 Code Secmn58

Division 5-Duties of Person making Minutes

58 Record of names of directors in relation to resolutions

The person who makes* a minute of a resolution passed for the purposes of
this Code at a meeting of directors must also record the name of any
director who-

a) was absent; or

b) voted against the resolution; or

4 abstained from voting on the resolution.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

Recording of resolutions
51. T h e person who records the minute of a resolution passed for the
purposes of this Code at a meeting of the directors of a corporation shall
record in the minute the name of any director who is absent from the
meeting when the resolution is passed, the name of any director who votes
against the resolution and the name of any director who is present when
the resolution is passed and abstains from voting on the resolution.
Takeovers Code Section 59

PART 5 GENERAL -
Division 1-Offences
59 Misstatements concerning proposals to make offers

1) A person must not make a public statement that he or she, alone or

jointly, proposes to make* offers* if-

a) the person knows that the statement is false or is recklessly

indifferent whether it is true or false; or

b) the person does not have reasonable grounds for believing that
the person, whether alone or jointly with some other person,
will be able to perform obligations under this Code in
connection with a takeover scheme* or announcement* if a
substantial proportion of the offers are accepted.

Penalty: A fine not exceeding $20,000, or imprisonment for a period

not exceeding 5 years, or both.

2) Within 2 months (or a further period permitted by the Commission in

writing) after a public statement that a person proposes to make offers,
the person must make offers which are not substantially less favourable
to the shareholders than the offers mentioned in the statement.

Penalty: A fine not exceeding $10,000, or imprisonment for a period

not exceeding 2 years, or both.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code.

Announcements of proposed take-over bids

52. (1) A person shall not, whether alone or together with another person
or other persons, make a public announcement to the effect that he
proposes; or that he and another person, or he and other persons, together
propose, to make take-over offers or to cause take-over offers to be made,
or to cause a take-over announcement to be made, if-
(a) he knows that the announcement is false or is recklessly
indifferent to whether it is true or false;
(b) in the case of an announcement that he proposes to make take-
over offers, or to cause take-over offers to be made, or to cause
a take-over announcement to be made-he has no reasonable
grounds for believing that he will be able to perform his
obligations arising under the take-over scheme or take-over
announcement, or arising under this Code in connection with
the take-over scheme or take-over announcement, if a
substantial proportion of the take-over offers, or of the offers
constituted by the take-over announcement, as the case may
be, are accepted; or
(c) in the case of an announcement that he and another person,
or he and other persons, together propose to make take-over
offers, or to cause take-over offers to be made, or to cause a
take-over announcement to be made-he has no reasonable
grounds for believing that he and the other person, or he and
the other persons, as the case may be, will together be able to
perform their obligations arising under the take-over scheme
or take-over announcement, or arising under this Code in
connection with the take-over scheme or take-over
announcement, if a substantial proportion of the take-over
offers, of or the offers constituted by the take-over
announcement, as the case may be, are accepted.
(2) A person who contravenes sub-section (1) is guilty of an offence the
penalty for which is a fine not exceeding $20,000 or imprisonment for a
period not exceeding 5 years, or both.

(3) Where a person, whether alone or together with another person or

other persons, makes a public announcement to the effect that he proposes,
or that he and another person or other persons together propose, to make
a take-over bid in relation to shares in a company, the person shall, within
2 months after making the announcement or such further period as the
Commission permits in writing, either alone or together with another
person or other persons, make a take-over bid in relation to shares in that
company in accordance with the public announcement.
(4) A person who contravenes sub-section (3) is guilty of an offence the
penalty for which is a fine not exceeding $10,000 or imprisonment for a
period not exceeding 2 years, or both.
 Takeovers code Section 59

3) A person who contravenes both subsections (1) and (2) may be convicted
of an offence for only one of thpse contraventions.

4) If a person contravenes subsection (1) or (2), he or she is liable to

compensate another person who suffered loss from entering into a
transaction* with respect to shares* in reliance on the public statement
even if the person has not been convicted of an offence. The amount
of the liability is to be decided by reference to the difference between
the price of the shares and the likely price if the statement had not
been made.

A person is not guilty of an offence under subsection (2) and is not

liable to pay compensation under subsection (4) if the person could
not reasonably have been expected to make offers because of-

a) circumstances that existed at the time of the statement but of

which the person was unaware and could not reasonably have
been expected to be aware; or

b) a change in circumstances after the statement was made that

was not caused, directly or indirectly, by the person.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Cde .
-

52. (10) In this section-

(a) a reference to making a take-over bid is a reference to-
(i) making take-over offers;
(ii) causing take-over offers to be made; or
(iii) causing a take-over announcement to be made; and
(b) a reference to making a take-over bid in accordance with a
public announcement to the effect that a take-over bid is
proposed to be made is a reference to making a take-over bid
the terms and conditions of which are the same as, or not
substantially less favourable to the shareholders in the target
company than, the terms and conditions of the take-over bid
referred to in the public announcement.
(5) A person who-
(a) makes a public announcement in contravention of sub-section
(1) and fails, in contravention of sub-section (3), to make a
take-over bid in accordance with the announcement; and
(b) is convicted of an offence under sub-section (2) or (4) in respect
of one of those contraventions,
is not liable to be convicted of an offence under sub-section (4) or (2), as
the case may be, in respect of the other of those contraventions.

(7) A person who makes a public announcement in contravention of

sub-section (1) or fails, in contravention of sub-section (3), to make a take-
over bid in accordance with a public announcement (whether or not he
has been convicted of an offence in respect of the contravention) is liable
to pay compensation to any other person who suffered loss as a result of
entering into a transaction with respect to shares in reliance on the public
announcement, and the amount of the compensation that the first-
mentioned person is liable to pay is an amount equal to the difference
between the price of the shares at which the transaction was entered into
and the price of the shares at which the transaction would have been likely
to be entered into if the first-mentioned person had not made the public
announcement.
(8) A person-
(a) is not guilty of an offence under sub-section (4); and
(b) is not liable to pay compensation under sub-section (7),
in respect of a failure to make a take-over bid in accordance with a public
announcement made by the person if it is established that-
(c) by virtue of circumstances that existed at the time of the making
of the public announcement but of which the person had no
knowledge and could not reasonably have been expected to
have knowledge; or
(d) by virtue of a change in circumstances after the making of the
announcement, not being a change in circumstances caused,
whether directly or indirectly, by the person,
the person could not reasonably have been expected to make the take-over
bid.
Takeovers Code S-n 59

6) Neither section 571 nor subsection 574 (2) of the Cmtponies (Viema)
Code applies to a contravention of subsection (2).

7) A certificate by the Commission that the Commission has not extended

the period under subsection (2) is prima facie evidence that the period
was not extended.

Offences relating to misstatements

60. It is an offence in the circumstances specified the following table for a
specified person to make* a statement that is false or misleading in a material
particular, or to omit material matter, unless the person has a specified defence.

[Table reproduced on following pages.]

-
Companies (Acquisition of Shares) (Victoria) Code .

52. (9) Notwithstanding anything in section 5 of this Code, neither section

571, nor sub-section 574 (2), of the Companies (Victoria) Code
applies in relation to a failure, in contravention of sub-section (3) of this
section, to make a take-over bid in accordance with a public announcement.
(6) In any proceedings, if there is produced a certificate in writing by
the Commission stating that the Commission has not, pursuant to sub-
section (3), permitted a further period for a person or persons specified in
the certificate to make a take-over bid in relation to shares in a company
so specified, it shall be presumed, unless the contrary is established, that
no such further period was permitted.

Liability for mis-statements

44. (1) Where-
(a) there is, in a statement that purports to be a Part A statement
served under paragraph 16 (2) (4,in a take-over offer or in a
notice given under sub-section 42 (2) or sub-section 43 (1) or
(4), matter that is false in a material particular or materially
misleading in the form or context in which it appears; or
(b) there is an omission of material matter from such a statement,
offer or notice,
a person to whom this sub-section applies is, subject to this section, guilty
of an offence.
(2) Where-
(a) there is, in a statement that purports to be a Part B statement
given under sub-section 22 (1) or a Part D statement served
under sub-section 32 (I), matter that is false in a material
particular or materially misleading in the form or context in
which it appears; or
(6) there is an omission of material matter from such a statement,
a person to whom this sub-section applies is, subject to this section, guilty
of an offence.
(3) Where-
(a) there is, in a statement that purports to be a Part C statement
served under paragraph 17 (10) (a), or in a notice given under
sub-section 42 (3) or sub-section 43 (1) or (4), matter that is
false in a material particular or materially misleading in the
form or context in which it appears; or
(b) there is an omission of material matter from such a statement
or notice,
a person to whom this sub-section applies is, subject to this section, guilty
of an offence.
 Companies (Acquisition of Shares) (Victoria) Code

44. (4) Where-

(a) there is-
(i) in a report that is set out in a Part B statement in
accordance with paragraph 22 (3) (a) or accompanies a
Part B statement in accordance with section 23;
(ii) in a report that is set out in a Part D statement in
accordance with paragraph 32 (3) (a);
(iii) in a report that accompanies, or is included in, a statement
issued with the consent of the Commission under section
37 or 38; or
(iv) in a report that accompanies a notice given under sub-
section 43 (4),
matter that is false in a material particular or materially
misleading in the form or context in which it appears; or
(6) there is an omission of material matter from such a report,
the person who made the report and, if that person is a corporation, any
officer of the corporation who is in default are, subject to this section, each
guilty of an offence.
(5) Where-
(a) a person proposes, or 2.or more persons together propose, to
dispatch a take-over offer or to cause a take-over offer to be
dispatched, or to cause a take-over announcement to be made,
in respect of shares in a company;
(6) the person, or either or any of the persons, referred to in
paragraph (a), or a person associated with the person or with
either or any of the persons, or, if the person or either or any
of the persons or any person associated with the person or with
either or any of the persons is a corporation, an officer of the
corporation or a person associated with such an officer-
(i) makes or issues, or causes to be made or issued, an oral or
written statement to the public, or publishes, or causes to
be published, an advertisement, relating to a prescribed
matter; or
(ii) dispatches, or causes to be dispatched, a document relating
to a prescribed matter to any of the holders of shares in,
or of renounceable options or convertible notes granted
or issued by, the target company; and
(c) there is in the statement or advertisement, or in the document,
matter that is false in a material particular or materially
misleading in the form or context in which it appears,
the person who made or issued the statement, published the advertisement
or dispatched the document, or caused the statement to be made or issued,
the advertisement to be published or the document to be dispatched, and,
if that person is a corporation, any officer of the corporation who is in
default, are, subject to this section, each guilty of an offence.
Takeovers Code Section 60-
 Companies (Acquisition of Shares) (Victm'a) Code

44. ( 6 )Where-
(a) the directors of a company have reason to believe that a person
proposes, or 2 or more persons together propose, to dispatch a
take-over offer or to cause a take-over offer to be dispatched,
or to cause a take-over announcement to be made, in respect
of shares in the company;
(b) the target company or a corporation that is related to the target
company or an officer of the target company or of such a
corporation or a person associated with such an officer-
(i) makes or issues, or causes to be made or issued, an oral or
written statement to the public, or publishes, or causes to
be published, an advertisement, relating to a prescribed
matter; or
(ii) dispatches, or causes to be dispatched, a document relating
to a prescribed matter to any of the holders of shares in,
or of renounceable options or convertible notes granted
or issued by, the target company; and
(c) there is in the statement or advertisement, or in the document,
matter that is false in a material particular or materially
misleading in the form or context in which it appears,
the person who made or issued the statement, published the advertisement
or dispatched the document, or caused the statement to be made or issued,
the advertisement to be published or the document to be dispatched, and,
if that person is a corporation, any officer of the corporation who is in
default, are, subject to this section, each guilty of an offence.
(7) Where-
(a) a take-over offer is dispatched, or a take-over announcement is
made, in respect of shares in a company;
(6) at any time during the period commencing when the take-over
offer is dispatched or the take-over announcement is made and
ending at the expiration of the period during which the take-
over offer remains open or the offers constituted by the take-
over announcement remain open, a person to whom this sub-
section applies-
(i) makes or issues, or causes to be made or issued, an oral or
written statement to the public, or publishes, or causes to
be published, an advertisement, in connection with the
offers under the relevant take-over scheme or in
connection with the take-over announcement, relating to
a prescribed matter; or
(ii) dispatches, or causes to be dispatched with or in connection
with the offers under the relevant take-over scheme or
with or in connection with the take-over announcement,
a document relating to a prescribed matter to any of the
holders of shares in, or of renounceable options or
convertible notes granted or issued by, the target company
(not being a document required by this Code to be so
dispatched); and
 Companies (Acquisition of Shares) (Victoria) Code . -

44. (7) (c) there is in the statement or advertisement, or in the document,

matter that is false in a material particular or materially
misleading in the form or context in which it appears,
that person, and, if that person is a corporation, any officer of the
corporation who is in default, are, subject to this section, each guilty of an
offence.
(8) For the purposes of sub-sections ( 3 , (6) and (7)-
(a) a reference to a document includes a reference to a disc, tape,
cinematograph film or other article from which sounds or
images can be reproduced; and
(b) a prescribed matter is a matter relating to affairs of, or to
marketable securities issued or to be issued by-
(i) the target company or a corporation that is related to the
target company;
(ii) the offeror or on-market offeror, as the case may be, or a
corporation that is related to the offeror or on-market
offeror; or
(iii) any other offeror or on-market offeror in relation to the
target company, or any corporation that is related to such
an offeror or on-market offeror.
(1 1) The persons to whom sub-section (1) applies are-
(a) the offeror;
(6) in a case where false or misleading matter appeared in, or
material matter was omitted from, a statement-
(i) if the offeror is or includes a corporation-a person who
was a director of that corporation at the time when the
statement was served, not being-
(A) a director who was not present at the meeting at which
the resolution authorizing the signing of the statement
was agreed to; or
(B) a director who voted against that resolution; and
(ii) subject to sub-section (15), a person a notice of whose
consent to the inclusion in the statement of a report made
by him has been lodged with the Commission under
paragraph 18 (2) (b); and
(c) in a case where-
(i) false or misleading matter appeared in, or material
matter was omitted from, an offer or notice; and
(ii) the offeror is or includes a corporation,
a person who was a director of that corporation at the time
when the offer was dispatched or the notice was given, as
the case may be.
SPECIFIED SPECIFIED PERSONS SPECIFIED DEFENCE
CIRCUMSTANCES
b) in a document relating
to a defined matter
sent to a holder of
shares in, or of
renounceable options
or convertible notes
issued by, the target
company,
by the target company, a
related corporation, an
officer of either or an
associate of such an officer.

During the offer period- The person who made the statement or sent the AS above 5.
document*; or
a) in a statement
relating to a defined if the offeror or an associate is a corporation, an
matter made to the officer of that corporation, who was knowingly
public; or concerned in the contravention.
b) in a document
relating to a defined
matter (except a
document that must
be sent under this
Code) sent in
connection with the
offers to a holder of
shares in, or of
renounceable
options or
convertible notes
issued by, the target
company,
 Companies (Acquisition of Shares) (Victoria) Code .

44. (12) The persons to whom sub-section (2) applies are-

(a) the target company;
(b) where the statement was signed as mentioned in paragraph 22
(2) (a) or 32 (2) (a)-a person who was a director of the target
company at the time when the statement was given or served,
not being-
(i) a director who was not present at the meeting at which
the resolution authorizing the signing of the statement
was agreed to; or
(ii) a director who voted against that resolution; and
(c) where the statement was signed as mentioned in paragraph 22
(2) (b) or 32 (2) (b)-the person who signed the statement.
(13) The persons to whom sub-section (3) applies are-
(a) the on-market offeror; and
(6) in a case where-
(i) false or misleading matter appeared in, or material matter
was omitted from, a statement; and
(ii) the on-market offeror is or includes a corporation,
a person who was a director of that corporation at the time
when the statement was served, not being-
(iii) a director who was not present at the meeting at which
the resolution authorizing the signing of the statement
was agreed to; or
(iv) a director who voted against that resolution.
(14) The persons to whom sub-section (7) applies are-
(a) the offeror or on-market offeror;
(b) a person associated with a person referred to in paragraph (a);
(c) the target company;
(d) an officer of the target company or a person associated with
such an officer; or
(e) if a person referred to in paragraph (a) or (b) is a corporation-
an officer of the corporation or a person associated with such
an officer.
(15) A person referred to in sub-paragraph (1 1) (6) (ii) is guilty of an
offence under sub-section (I), and liable to pay compensation under sub-
section (9), only in respect of false or misleading matter in the report
referred to in that sub-paragraph or an omission of material matter from
that report.
 SPECIFIED SPECIFIED PERSONS SPECIFIED DEFENCE
CIRCUMSTANCES
made by the offeror or an
associate, the target
company, an officer of the
target company or an
associate of such an officer,
or, if the offeror or the
associate is a corporation or
an associate of such an
officer.
. - ~

Penalty: A fine not exceeding $5000 or imprisonment for a period not

exceeding one year, or both.

Note: Original 44: Rendered virtually

incomprehensible by poor structure and
uparation qf intrrda,pndcnt m a t e d , as the
fdhingcompan#aistc tabkdcnu#uhatu:
PhinEnglish Olisinal
60 44
Table 1 {I) (11) (16) (20)
Table 2 (2) (12) (16) (20)
Table 3 (3) (13)(16) (20)
Table 4 (4) (16)(20)
Table 5 (5)(8) (17) (20)
Table 6 (6) (8) (17) (20)
7 (7) (8) (14) (17)(20)
61 (1) (9) (10) (15) (21)
61 (2) (18) (19)
 Companies (Acquisition of Shares) (Vicmib) Code

44.(16) It is a defence to a prosecution of a person for an offence against

sub-section (I), (2), (3) or (4) if the person proves-
(a) that, when the statement was served or given, the offer was
dispatched, the notice was given or the report was made, he-
(i) believed on reasonable grounds that the false matter was
true;
(ii) believed on reasonable grounds that the misleading matter
was not misleading;
(iii) in the case of an omission, believed on reasonable grounds
that no material matter had been omitted; or
(iv) in the case of an omission, did not know that the omitted
matter was material; and
(b) that-
(i) on the date of the information, he so believed or did not
so know; or
(ii) before that date, he ceased so to believe or came to know
that the omitted matter was material, and forthwith gave
reasonable notice containing such matters as were
necessary to correct the false or misleading
matter or the omission.
(17) It is a defence to a prosecution of a person for an offence against
sub-section ( 3 , (6) or (7) if the person proves-
(a) that, when the statement was made or issued, the advertisement
was published or the document was dispatched, he-
(i) believed on reasonable grounds that the false matter was
true; or
(ii) believed on reasonable grounds that the misleading matter
was not misleading; and
(b) that-
(i) on the date of the information, he so believed; or
(ii) before that date, he ceased so to believe and forthwith
gave reasonable notice containing such matters as were
necessary to correct the false or misleading matter.
(20) The penalty for an offence arising under this section is a fine not
exceeding $5,000 or imprisonment for a period not exceeding 1 year, or
both.
(21) Nothing in this section affects any cause of action existing apart
from this section.
Takeovers Code Section 61

61 Compensation for loss resulting from misstatements

1) Without prejudice to any other cause of action, a person who has failed
to comply with section 60 is liable to pay compensation to another
person who acts or fails to act on the basis of the relevant state'ment for
any loss or damage suffered as a result*, even if the person has not
been convicted of the offence.

2) It is a defence to an action for compensation if the defendent proves

that, at the time the statement was made-

a) the defendant believed on reasonable grounds that the false

matter was true or that the misleading matter was not
misleading; or

b) in the case of an omission, the defendant believed on reasonable

grounds that no material matter had been omitted, or did not
know that omitted matter was material

and that, if the action is brought by a person who acted on the faith of
the statement-

c) the defendant, at the time when the plaintiff so acted, believed

or did not know as mentioned in paragraph (a)or (b);or

d) before the plaintiff so acted, the defendant ceased to believe or

not to know as mentioned in paragraph (a)or (b) and as soon
as reasonably possible gave reasonable notice to correct the
error.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code -

44. (9) A person to whom sub-section (I), (2) or (3) applies, or a person
referred to in sub-section (4), is, in the circumstances referred to in that
sub-section, whether or not he has been convicted of an offence under that
sub-section, liable, subject to this section, to pay compensation to a person
who acts, or refrains from acting, on the faith of the contents of the
relevant statement, offer, notice or report for any loss or damage sustained
by that person by reason of his reliance on the false or misleading matter
or by reason of the omission of material matter.
(10) A person referred to in sub-section ( 5 ) , (6) or (7) is, in the
circumstances referred to in that sub-section, whether or not he has been
convicted of an offence under that sub-section, liable, subject to this section,
to pay compensation to a person who acts, or refrains from acting, on the
faith of the contents of the relevant statement, advertisement or document
for any loss or damage sustained by that person by reason of his reliance
on the false or misleading matter.
(18) It is a defence to an action under sub-section (9) if the defendant
proves-
(a) any matter referred to in paragraph (16) (a); and
(b) in a case where the action is brought by a person who acted on
the faith of the contents of the relevant statement, offer, notice
or report, that-
(i) when the plaintiff so acted, the defendant believed as
mentioned in sub-paragraph (16) (a) (11, (ii) or (iii) or did
not know that the omitted matter was material; or
(ii) before the plaintiff so acted, the defendant ceased so to
believe or came to know that the omitted matter was
material, and forthwith gave reasonable notice containing
such matters as were necessary to correct the false or
misleading matter or the omission.
(19) It is a defence to an action under sub-section (10) if the defendant
proves-
(a) any matter referred to in paragraph (17) (a); and
(b) in a case where the action is brought by a person who acted on
the faith of the contents of the relevant statement,
advertisement or document, that-
(i) when the plaintiff so acted, the defendant believed as
mentioned in sub-paragraph (17) (a) ( I )or (ii); or
(ii) before the plaintiff so acted, the defendant ceased so to
believe and forthwith gave reasonable notice containing
such matters as were necessary to correct the false or
misleading matter.
62 Presumption concerning a person's knowledge

Unless the contrary is proved, a person is presumed to have had, at a

particular time, the same knowledge as a person had who was acting as his
or her employee or agent in relation to matters which give rise to proceedings
under this Code.

63 Offence to contravene Code

1) A person who contravenes a provision of this Code in respect of which

a penalty is not provided is guilty of an offence.

2) An officer of a corporation who is in any way knowingly concerned in

a contravention by the corporation is guilty of an offence.

3) The penalty for an offence against this section is a fine not exceeding
$2,500, or imprisonment for a period not exceeding 6 months, or both.

4) Section 570 and subsection 571 (7) of the Companies (Victoria) Code
do not apply in relation to this Code.

5) Subsection 571 (5) of the Companies (Victoria) Code applies in relation

to this Code with any necessary modifications.

Note. Original 55 and 8 (11): distributed

throughout the Code. It is su@bt w use the
phrase 'in any way knowingly c o n d in the
contravention' in the relevant substantive
provisions to cover the entire content of 55.

* See Schedule 2.
 - -
Companies. -(Acquisition of Shares) (Victoria) Code

8(10) In any proceedings under or arising out of this Code, a person

shall, in the absence of proof to the contrary, be presumed to have been
aware at a particular time of a fact or occurrence of which an employee or
agent of the person having duties or acting on behalf of his employer or
principal in connection with the matter to which the proceedings relate
was aware at the time.

Offences
53. (1) A person who contravenes or fails to comply with a provision of
this Code is guilty of an offence.
(2) Where an offence against this Code is committed by a corporation,
an officer of the corporation who is in default is guilty of an offence.
(3) The penalty for an offence arising under this section is a fine not
exceeding $2,500 or imprisonment for a period not exceeding 6 months,
or both.
(4) The preceding provisions of this section do not apply in relation to
sections 31B, 44,49 and 52.
(5) Notwithstanding anything in section 5 of the Companies
(Acquisition of Shares) (Application of Laws) Act 1981-
(a) section 570, and sub-section 571 (7), of the Companies
(Victoria) Code do not apply in relation to this Code; and
(b) sub-section 571 (5) of that Code has effect for the purposes of
this Act as if "the penalty applicable to the offence" were
omitted from that sub-section and "the penalty for the offence"
were substituted.

Officers in Default
55. Where a provision of this Code provides that an officer of a corporation
who is in default is guilty of an offence, the reference to the officer who is
in default shall, in relation to a contravention of, or failure to comply with,
the provision, be construed as a reference to any officer of the corporation
(including a person who subsequently ceased to be an officer of the
corporation) who is in any way, by act or omission, directly or indirectly,
knowingly concerned in or party to the contravention or failure.
8 (11) In determining, for the purposes of a provision of this Code,
whether or not a person's contravention of such a provision was due-
(a) to the person's inadvertence or mistake or to the person not
being aware of a relevant fact or occurrence; or
(6) to the person's inadvertence or mistake or to circumstances
beyond the person's control,
the person's ignorance of, or a mistake on the person's part concerning, a
matter of law shall be disregarded.
Takeovers Code Section 64

Division 2-Powers of Court and Commission

64 Powers of Court if the offers relating to a Part A statement are not sent

1) If-

a) a I'art A statement* is served* on the target company* and the

offeror* acquires* shares* in the relevant class;* and

6) the qcquisition would contravene section 1 but for paragraph

(&of schedule 3; and

C) the offeror does not send* the offers* within 28 days after the
statement is served, .

the Commission may apply to the Coun for an order under subsection (2).

2) The Coun may make an order, including an order-

a) specified in subsection 74 (1); or

b) requiring that the offeror send the offers within a specified

time and as the Commission approves.+

3) If the Court orders a person to send the offers, the Court may order
the person-

a) to send with each offer a notice setting out specified

information; and

b) to serve on the target company and on each notifiable securities

exchange* of the target company, and to lodge with the
Commission, a copy of the notice within a specified period.

4) Offers sent under an order are taken to be made under a takeover

scheme*.

* See Schedule 2.
+ See 77 (2).
 Companies (Acquisition of Shares) (Victmia) Code .

Orders where offers not dispatched pursuant to Part A statement

46. (1) Where-
(a) a Part A statement relating to offers under a take-over scheme,
being offers relating to shares included in a class of shares in a
target company, is served on the company;
(6) after the Part A statement is served the offeror referred to in
the Part A statement acquires shares included in that class;
(c) the acquisition of those shares would, but for paragraph 13 (3)
(a), have contravened section 11; and
(d) the offeror does not dispatch the offers to which the Part A
statement relates within the period of 28 days after the Part A
statement is served on the target company,
the Court may, on the application of the Commission make such order or
orders as it thinks fit, including, but without limiting the generality of the
foregoing-
(e) one or more of the orders referred to in sub-section 45 (1); and
(f) an order directing the offeror, within such time as is specified
in the order, to dispatch in an approved manner to each holder
(other than the offeror) of shares included in that class an offer
to which the Part A statement relates.
(2) Where, under paragraph (1) (f), the Court orders a person to dispatch
offers, the Court may also order the person-
(a)to dispatch with each offer a notice setting out such information
as the Court specifies; and
(b) within such period as is specified in the order, to serve on the
target company, lodge with the Commission, and, if the target
company is a listed company, serve on each notifiable securities
exchange in relation to the target company, a copy of the
notice.
(3) Where offers are dispatched pursuant to an order made by the Court
under paragraph (1) 0, the offers shall be deemed to be made under a
take-over scheme.
Takeovers Code Section 64

Note. Original 46: the Code's various

provisions confer powers on the Court in an
inconsistent way. In some cases (for example,
45, 48) the power is to make an order 'as it
thinks fit: in others (for example, 47 (l), 47
(IA)) it is to make an order 'as it thinks
necessary or expedient: in yet others (for
example, 49 and 50), the power is to make an
order 'as the Court thinks just and equitable: It
is doubtful whether there is any substantial
diflerence between these formulations-surely
the Court is always bound to act justly and to do
what it thinksfit. The diflmence may simply be
explicable as an inconsistency of style.

65 Powers of Court to protect the interests of persono affected by a breach

1) If a Part A statement* has been served* or a takeover announcement*

has been made*, the Commission, the offeror,* the target company*
or a person who holds shares,* renounceable options* or convertible
notes* in the target company or held them when the Part A statement
was served or the announcement was made, may apply to the Court
for an order for the protection of the interests of persons affected by
the takeover scheme or announcement, including holders of non-
voting shares, renounceable options or convertible notes.

2) If the Court is satisfied that the Code has been contravened, it may
make orders to protect their interests, including orders-

a) directing the offeror or the target company to give* specified

information to the holder of shares, renounceable options or
convertible notes;

b> directing a person to do within a specified time an act required

under this Code to be done even if the time for doing the act
has passed;

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

Orders to protect interest of certain persons

47. (1) Where a Part A statement relating to offers under a take-over
scheme has been served on a target company or a take-over announcement
has been made, the Court may, on the application of the Commission, the
offeror, the on-market offeror, the target company or any person who holds
shares in the target company or held shares in the target company at the
time when the Part A statement was so served or the take-over
announcement was made, if the Court is satisfied that a provision of this
Code has been contravened or has not been complied with, make such
orders as it thinks necessary or expedient to protect the interests of a person
affected by the take-over scheme or takeover announcement (including a
person who is the holder of non-voting shares in, or renounceable options
or convertible notes granted or issued by, the target company), including,
but without limiting the generality of the foregoing, one or more of the
following orders:
(a) an order directing the offeror, the on-market offeror or the
target company to supply to the holders of shares in the target
company such information as is specified in the order;
(b) where a person has failed to do an act or thing that he was
required by this Code to do-an order directing that person to
do that act or thing within such time as is specified in the
order, notwithstanding that the time specified in this Code for
the doing of that act or thing has expired;
Takeovers
a,- - -
Code -
W o n 65

c) restraining or directing the exercise of a voting or other right

attached to shares, renounceable options or convertible notes;
d) restraining or directing the disposal* of an interest in shares,
renounceable options or convertible notes in the target
company;
e) vesting an interest in shares, renounceable options or
convertible notes in the Commission;
f) directing the target company not to register the transfer or
transmission of shares, renounceable options or convertible
notes;
g) cancelling or declaring voidable an offer* or arrangement
relating to a statement or announcement;
h) to secure compliance with any other order under this section-
directing a person to do or not to do a specified act.

3) If an offeror fails to comply with a condition specified under section

17, the Commission, the target company or a person affected by the
failure may apply to the Court for an order for the protection of
interests of persons affected by the failure.

4) To protect their interests, the Court may make orders-

a) directing the offeror to supply specified information to the

holders of shares, renounceable options or convertible note$
or

6) directing the offeror to do within a specified period an act that

the offeror was required to do, even if the time for doing that
act has passed; or
c) of a kind mentioned in paragraph (2) (c) to (h).

Note. Original47 ( I ) (IA): excessivesentence

sentence length.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code .

47. ( 1 ) (c) an order restraining the exercise of any voting or other rights
attached to any shares;
(6) an order restraining the disposal of, or of any interest in, shares
in the target company;
(e) an order directing the disposal of, or of any interest in, shares
in the target company;
(ea) an order vesting in the Commission shares, or any interest in
shares, in the target company;
( f ) an order directing the target company not to register the transfer
or transmission of shares;
(g) an order cancelling a contract, arrangement or offer relating
to the take-over scheme or take-over announcement;
(h) an order declaring a contract, arrangement or offer relating to
the take-over scheme or take-over announcement to be
voidable;
@ for the purpose of securing compliance with any other order
made under this section, an order directing a person to do or
refrain from doing a specified act.
(2) In this section, "shares", in relation to a company, includes-
(a) shares in the company that are not voting shares; and
(b) renounceable options and convertible notes granted or issued
by the company.
(1A) Where an offeror contravenes a condition specified in a consent
under section 21 given in relation to an offer made under a take-over
scheme, the Court may, on the application of the Commission, the target
company in relation to the take-over scheme, or any person affected by the
contravention, make such orders as the Court thinks necessary or expedient
to protect the interests of a person affected by the contravention, including,
but without limiting the generality of the foregoing, one or more of the
following orders:
( a ) an order directing the offeror to supply to the holders of shares
in the target company such information as is specified in the
order;
(b) in a case where the contravention is constituted by a failure to
do a particular act or thing-an order directing the offeror to
do that act or thing within such period as is specified in the order,
notwithstanding that the period specified in the condition for
the doing of the act or thing has expired;
(c) an order of a kind referred to in any of paragraphs ( 1 ) (c)to @,
inclusive.
Takeovers Code Section 66

66 Powers of Court in relation to inadvertent breach of Code

If the Court is satisfied on application by an interested person that a

contravention of this Code stiould be excused for any reason, including
inadvertence, mistake or circumstances beyond the control of the lierson
who failed to comply with the Code, but excluding ignorance or mistake of
law, the Court may declare that an act or document is not invalid despite
the failure to comply and is as effective as if the failure had not taken place.

Note. Original 48 (2)-(3A): limit the

pctsonswhomaymakeapplhtionsandthetypc
of order which may be made more narmwly
than subs& (1). However, subsletion (I)
appcors to aver adeqwely both thapttsons and
the orders. An order thar an act is as eflachachve
as
if the falure had not taken place coould be
su-t to cure, from the beginning, a dcfect
relating to a Part A. or other statement. It has
been assumed that subsections (2)-(3A) are
not intended to w d the general pmision,
but are merely exomph.
Original 48 (4): excessive caution.

* See Schedule 2.
 CompanieJ (Acquisition of Shares) (Victoria) Code .

Court may excuse contravention or non-compliancedue to inadvertence.

48. ( 1 ) Where a person has contravened or failed to comply with a
provision of this Code and the Court is satisfied that the contravention or
failure was due to inadvertence, mistake or circumstances beyond his
control and that the contravention or failure ought to be excused or is
satisfied on any other grounds that the contravention or failure ought to
be excused, the Court may, on the application of an interested person,
make such order as it thinks fit declaring any act or matter not to be invalid
by reason of the contravention or failure and declaring any act or matter
to have force or effect as if there had been no such contravention or failure.
(2) Where-
(a) offers to acquire shares in a company, being offers that
purported to be made under a take-over scheme, have been
made;
(b) a requirement of sub-section 16 (2) has not been complied
with; and
(c) the Court is satisfied, on application made by the person who
made the offers, that the non-compliance was due to
inadvertence, mistake or circumstances beyond his control and
that the non-compliance ought to be disregarded, or is satisfied
on any other grounds that the non-compliance ought to be
disregarded,
the Court may make an order directing that the offers shall be deemed to
have been made under a take-over scheme.
(3) Where-
(a) a document purporting to be a Part A statement or a Part C
statement is served on a company;
(b) the document does not comply with all the requirements of
Part A or Part C, as the case may be, of the Schedule; and
(c) the Court is satisfied, on application by the person by whom or
on whose behalf the document was served, that the non-
compliance was due to inadvertence, mistake or circumstances
beyond his control and that the non-compliance ought to be
disregarded, or is satisfied on any other grounds that the non-
compliance ought to be disregarded,
the Court may make an order directing that the document shall be deemed
to be, and at all relevant times to have been, a Part A statement or a Part C
statement, as the case may be.
Takeovers Code 67

67 Application for a declaration that an agreement, payment or benefit was

unfair or unconscionable

1) An application may be made to the Court for a declaration that the

giving of a benefit or the making of an agreement to give* a benefit
(including employment or performance of services for a fixed period)
to a director, secretary or executive officer of a corporation or related
corporation was unfair or unconscionable having regard to the interests
of the corporation.

2) The application may be made* by-

a) the corporation; or

b) a person who holds or persons who together hold shares*

representing at least 10% of the total nominal value of the
shares in the corporation or in a related corporation; or

C) the Commission.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

48. (3A) Where-

(a) an offeror purports to vary offers under a take-over scheme in
accordance with section 27 or in accordance with the
regulations;
(6) a requirement of section 27, or of the regulations, as the case
may be, has not been complied with; and
(c) the Court is satisfied, on application made by the offeror, that
the non-compliance was due to inadvertence, mistake or
circumstances beyond his control and that the non-compliance
ought to be disregarded, or is satisfied on any other grounds
that the non-compliance ought to be disregarded,
the Court may make an order directing that the offers shall be deemed to
have been varied in accordance with section 27 or in accordance with the
regulations, as the case requires.
(4) This section has effect notwithstanding anything contained in any
other provision of this Code.

Unfair or unconscionable agreements, payments or benefits

50. (1) Subject to sub-section (3), this section applies to-
(a) an agreement enterecl into by a corporation for the making of
a payment by the corporation to, or for the provision of a
benefit by the corporation for, a person who is a director,
secretary or executive officer of the corporation or of a
corporation that is related to the corporation; or
(b) a payment or benefit made or provided by a corporation,
otherwise than pursuant to an agreement, to or for such a
person,
where tile agreement is entered into or the payment or benefit is made or
provided by the corporation-
(c) if the corporation is a company-
(i) during the period of 12 months after a Part A statement
has been served on, or a take-over announcement has
been made in respect of shares in, the company or a
corporation that is related to the company; or
(ii) at a time when the directors of the company have reason
to believe that a take-over offer or take-over announcement
is to be made in respect of shares in the company or in a
corporation that is related to the company; or
 3) The application may only be made if the corporation gave the benefit
or made the agreement within 12 months after the service* of a Part
A statement* or the making of a takeover announcement* under this
Code or a corresponding law* and-

a) the Part A statement or the announcement-

i) if the corporation is a company*-was in respect of the

shares in the company or a related corporation; or

ii) if the corporation is not a company-was in respect of

the shares in a company that is related to the
corporation; or .
b) the benefit was given or the agreement was made at a time
when the directors had reason to believe that a Part A statement
would be served or an announcement would be made under
this Code or a corresponding law-

i) if the corporation is a company-in respect of the shares

in the company or a related corporation; or

ii) if the corporation is not a company-in respect of the

shares in a company that is related to the corporation.

4) The application must be made within 12 months after the giving

of the benefit or the making of the agreement or within a longer period
allowed by the Court.

Note. Original SO: made virtually

unintelligt'ble by lengthy intduction stating
what the section applies to--central message
delayed until subs& (4).

* See Schedule 2.
 - - -
Companies (Acquisition of Shares) (Victoria) Code
-

50. (1) (d) if the corporation is not a company-

(i) during the period of 12 months after a Part A statement
has been served on, or a take-over announcement has
been made in respect of shares in, a company that is
related to the corporation; or
(ii) at a time when the directors of the corporation have reason
to believe that a take-over offer or take-over announcement
is to be made in respect of shares in a company that is
related to the corporation.

(2) For the purposes of paragraph (1) (a), a corporation that enters into
a contract with a person for the employment of, or for the performance of
services by, that person for a fixed period shall be taken to have entered
into an agreement for the provision of a benefit for that person.
(5) The references in paragraph (1) (c) to a Pan A statement having
been served on, or a take-over announcement having been made in respect
of shares in, a corporation or to a take-over offer or take-over announcement
that is to be made in respect of shares in a corporation shall, in the case of
a corporation that is not a company, be construed as a reference to a part
A statement, take-over announcement or take-over offer under the
corresponding law of the State or Territory in which the corporation is
incorporated.
(4) Where a corporation enters into an agreement, or makes or provides
a payment or benefit, to which this section applies and the Court is satisfied,
on application by the corporation, by the Commission, or by a person who
holds, or persons who between them hold, shares in the corporation or in
a corporation that is related to the corporation that represent not less than
10% of the aggregate nominal value of the shares in the corporation or in
the related corporation, as the case may be, being an application made
within 12 months, or such longer period as the Court thinks reasonable in
the circumstances, after the agreement was entered into, or the payment
or benefit was made or provided, as the case may be, that the entering into
the agreement, or the making or provision of the payment or benefit, was
unfair or unconscionable having regard to the interests of the corporation,
the Court may-
Takeovem Code Section 68

68 Powers of Court in making a declaration

1) If the Court makes a declaration, the Court may make* an order,

including an order-

a) cancelling the agreement or a part of it, or declaring it or a

part of it to be void or to have been void from the beginning;
or

b) directing the person who has received a benefit, or some other

person specified in the order, to make a payment or transfer
property to the corporation or to do a specified act for its
benefit.

2) T h e Court may not make an order if-

a) the benefit or agreement was approved or ratified by an ordinary

resolution of the target company*; and

b) neither the person who received or was entitled* to receive

the payment or benefit nor an associate* voted, personally or
by proxy, on the resolution.

* See Schedule 2.

174
 Companies (Acquisition of Shares) (Victoria) Code

50. (4) (a) in the case of an agreement-

(i) make an order declaring the agreement or any part of the
agreement to be void and, if the Court thinks fit, to have
always been void; and
(ii) if the Court thinks it just and equitable to do so-make an
order directing any person to whom a payment was made
or for whom a benefit was provided under the agreement,
or another person specified in the order, to make a payment
or transfer property to the corporation or to do any other
act for the benefit of the corporation;
(b) in the case of a payment or benefit-if the Court thinks it just
and equitable to do so, make an order directing the person to
whom the payment was made or for whom the benefit was
provided, or another person specified in the order, to make a
payment or transfer property to the corporation or to do any
other act for the benefit of the corporation; and
(c) in either case-make any other order that the Court thinks
appropriate.

(3) This section does not apply to an agreement that has been entered
into, or to a payment or benefit that has been made or provided, by the
company (in this sub-section referred to as the "target company") to shares
in which the Part A statement or take-over announcement relates, or in
respect of shares in which the directors believe that a take-over offer or
take-over announcement is to be made, or by a corporation that is related
to the target company if-
(a) the agreement, payment or benefit has been approved by an
ordinary resolution of the target company (whether before or
after the agreement was entered into or the payment or benefit
was made or provided); and
(b) where the person who is entitled to receive, or has received,
the payment or benefit, or a person associated with that person,
was a member of the target company at the time when the
resolution was passed-that member did not vote, either
personally or by proxy, on the resolution.
Takeovers Code Section 69

69 Powers of Commission to exempt from Code or modify its application

1) The Commission may in writing-

a) exempt a person, conditionally or unconditionally, from

compliance with a requirement of this Code; or

b) declare that this Code has effect in relation to a particular

person in particular circumstances as if a specified provision
had been modified in a specified manner.

2) T h e Commission must publish a copy of the exemption or declaration

in the Gazette but failure to do so does not affect validity of the
exemption or declaration.

3) A person must comply with any conditions of the exemption. If the

person does not, the Court may, on application by the Commission,
order the person to comply.

4) In using its powers under this section, the Commission must take
account of the desirability of the acquisition* of shares* in a company*
taking place in an efficient, competitive and informed market and of
the need to ensure-

a) that the shareholders and directors-

i) know the identity of a person who proposes to acquire

a substantial interest in the company; and

ii) have a reasonable time to consider the proposal; and

iii) are given* sufficient information to be able to assess its

merits; and

* See Schedule 2 .
 Companies (Acquisition of Shares) (Victoria) Code .
Power to exempt from compliance with Code
57. (1) The Commission may, by instrument in writing, exempt a person,
as specified in the instrument and subject to such conditions (if any) as are
specified in the instrument, from compliance with all or any of the
requirements of this Code.

Power to declare that Code applies as if modified

58. (1) The Commission may, by instrument in writing, declare that this
Code shall have effect in its application to or in relation to a particular
person or persons in a particular case as if a provision or provisions of this
Code specified in the instrument was or were omitted or was or were
modified or varied in a manner specified in the instrument, and, where
such a declaration is made, this Code has effect accordingly.
(2) The Commission shall cause a copy of an instrument executed
under sub-section (1) to be published in the Gazette, but failure of the
Commission to do so does not affect the validity of the instrument.

Commission to take account of certain matters

59. In exercising any of its powers under section 57 or 58, the Commission
shall take account of the desirability of ensuring that the acquisition of
shares in companies takes place in an efficient, competitive and informed
market and, without limiting the generality of the foregoing, shall have
regard to the need to ensure-
(a) that the shareholders and directors of a company know the
identity of any person who proposes to acquire a substantial
interest in the company;
(6) that the shareholders and directors of a company have a
reasonable time in which to consider any proposal under which
a person would acquire a substantial interest in the company;
(c) that the shareholders and directors of a company are supplied
with sufficient information to enable them to assess the merits
of any proposal under which a person would acquire a
substantial interest in the company; and
Takeovers Code -on 69

b) that, as far as practicable, all relevant shareholders have equal

opportunities to share in any benefits to shareholders under
any proposal under which a person would acquire a substantial
interest in the company.

5) Subsection (4) does not require the Commission to exercise its powers
in a particular way in a particular case.

Note. Original 57, 58 and 59: unnecessary

separation of related material. ,

70 Powers of Commission to declare an acquisition of shares or other conduct

unacceptable

1) If the Commission is satisfied that shares* were acquired* in

circumstances where-

a) the shareholders and directors did not-

i) know the identity of a person who proposed to acquire

a substantial interest in the company*; or

ii) have a reasonable time to consider the proposal; or

iii) have sufficient information to be able to assess its merits;

or

b) the shareholders did not have reasonable and equal

opportunities to share in a benefit (of any type whatever) to
any shareholder or associate* in connection with the
acquisition or proposed acquisition by a person of a substantial
interest in the company,

the Commission may declare in writing, within 90 days after the

acquisition or conduct, that the acquisition or conduct was
unacceptable.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

59. (d) that, as far as practicable, all shareholders of a company have

equal opportunities to participate in any benefits accruing to
shareholders under any proposal under which a person would
acquire a substantial interest in the company,
but nothing in this section shall be taken to require the Commission to
exercise any of its powers in a particular way in a particular case.

Power of Commission to declare acquisition of shares or other conduct

to be unacceptable
60. (1) Where the Commission is satisfied that an acquisition of shares
occurred in circumstances where-
(a) the shareholders and directors of a company did not know the
identity of a person who proposed to acquire a substantial
interest in the company;
(b) the shareholders and directors of a company did not have a
reasonable time in which to consider a proposal under which
a person would acquire a substantial interest in the company;
(c) the shareholders and directors of a company were not supplied
with sufficient information to enable them to assess the merits
of a proposal under which a person would acquire a substantial
interest in the company; or
(d) the shareholders of a company did not all have reasonable and
equal opportunities to participate in any benefits, or to become
entitled to participate in any benefits, accruing, whether directly
or indirectly and whether immediately or in the future, to any
shareholder or to any person associated with a shareholder, in
connection with the acquisition, or proposed acquisition, by
any person of a substantial interest in the company, the
Commission may, within 90 days after that acquisition of shares
occurred, by instrument in writing, declare that acquisition of
shares to have been an unacceptable acquisition and, where
such a declaration is made, the person who acquired those
shares shall be deemed, for the purposes only of section 45, to
have acquired those shares in contravention of section 11.
Takeoveis Code . Section 70

2) If the Commission makes a declaration that an acquisition was

unacceptable, the person who made* the acquisition is to be treated as
having acquired the shares in breach of section 1, but only for the
purposes of section 74.

3) As soon as practicable, the Commission must-

a) cause a copy of the declaration to be served* on each person

to whom it relates; and

b) publish a copy in the Gazette,

but failure to do so does not affect the validity of the declaration.

Note. Original 60 (1) (d) and (3) (d):

circumlocution.

* See Schedule 2.
 .Companies (Acquisition of Shares) (Victoria) Code

60. (3) Where the Commission is satisfied that, as a result of conduct

engaged in by a person in relation to shares in, or the affairs of, a company-
(a) the shareholders and directors of a company did not know the
identity of a person who proposed to acquire a substantial
interest in the company;
(b) the shareholders and directors of a company did not have a
reasonable time in which to consider a proposal under which
a person would acquire a substantial interest in the company;
(c) the shareholders and directors of a company were not supplied
with sufficient information to enable them to assess the merits
of a proposal under which a person would acquire a substantial
interest in the company; or
(4 the shareholders of a company did not all have reasonable and
equal opportunities to participate in any benefits, or to become
entitled to participate in any benefits, accruing, whether directly
or indirectly and whether immediately or in the future, to any
shareholder or to any person associated with a shareholder, in
connection with the acquisition, or proposed acquisition, by
any person of a substantial interest in the company,
the Commission may, within 90 days after that conduct was engaged in,
by instrument in writing, declare that conduct to have been unacceptable
conduct.
(6) Where the Commission makes a declaration under this section, the
Commission shall as soon as practicable-
(a) cause a copy of the instrument by which the declaration was
made to be given to, or served on, any person to whom the
declaration relates; and
(b) cause a copy of that instrument to be published in the Gazette.
(7) The validity of a declaration under this section is not affected by
failure of the Commission to comply with sub-section (6)in relation to the
declaration.
Takeovers Code Section 71

71 Power of Court with respect to a declaration

1) On an application under section 74 in relation to an acquisition* that

the Commission has deciared unnacceptable, the Court may declare
that it was not an unacceptable acquisition.

2) If the Commission declares that conduct was unacceptable, the Court,

on the appiication of the Commission, the target company* or a
member of the company*, may make-

a) an order to protect the rights of a person affected by the

conduct or to ensure, as far as possible, that offers* proceed as
if that conduct had noi been engaged in; and

6) one or more of the following orders:

i) directing the offeror* or the target company to give*

specified information to the holders of shares*;

ii) restraining the exercise of a voting or other right

attached to shares;

iii) restraining or directing the disposal* of an interest in

shares;

iv) vesting an interest in shares in the Commission;

v) directing the company not to register the transfer or

transmission of shares;

vi) cancelling or declaring voidable an offer or arrangement

relating to offers or proposed offers; and

vii) to secure compliance with any other order under this

section-directing a person to do or not to do a specified
act.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

60. (2) Where an application is made to the Court under sectiorl 45 in

relation to an acquisition of shares that has been declared by the
Commission pursuant to sub-section (1) to havc been an unacceptable
acquisition, the Court may, instead of making any of the orders referred to
in section 45, declare that the acquisition was not an unacceptable
acquisition and where the Court so declares, the declaration of the
Commission has no further effect.
(4) Where, pursuant to sub-section (3) the Commission declares conduct
that has been engaged in by a person in relation to shares in, or the affairs
of, a company, to have been unacceptable conduct, the Court may, on the
application of the Commission, the company or a member of the company,
make-
(a) any order that it thinks necessary or expedient to protect the
rights of any person affected by the conduct or to ensure, as far
as possible, that a take-over scheme or take-over announcement
or a proposed take-over scheme or take-over announcement in
relation to shares in the company proceeds in the manner in
which it would have proceeded if that conduct had not been
engaged in;
(b) without limiting the generality of paragraph (a), any one or
more of the following orders:
(i) an order directirig a person to supply to the holders of
shares in the company such information as is specified in
the order;
(ii) an order restraining the exercise of any voting or other
rights attached to any shares;
(iii) an order restraining the disposal of, or of any interest in,
shares in the company;
(iv) an order directing the disposal of, or of any interest in,
shares in the company;
(v) an order vesting in the Commission shares, or any interest
in shares, in the company;
(vi) an order directing the company not to register the transfer
or transmission of shares;
T8kt30~erSCode Section 71

3) On an application by the person who acquired the shares or engaged

in the conduct, the Court may declare that an acquisition of shares or
conduct the Commission has declared to have been unacceptable was
not unacceptable.

4) If the Court so declares, the Commission's declaration lapses.

Note. Original 60 (4): unnecessary cross-

referencing.

72 Power of Commission to make orders while a declaration is in force

1) If a declaration that an acquisition* of shares* or conduct by a person

was unacceptable is in force, the Commission may, by publication in
the Gazette, make* orders-

a) _ restraining-
i) a specified person from disposing* of or from acquiring
an interest in specified shares;
ii) the exercise of voting or other rights attached to
specified shares;

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code -

60. (4) (b) (vii) an order cancelling a contract, arrangement or offer

relating to a take-over scheme or take-over announcement
or a proposed take-over scheme or take-over
announcement in relation to shares in the company;
(viii) an order declaring a contract, arrangement or offer relating
to a take-over scheme or take-over announcement or a
proposed take-over scheme or take-over announcement
in relation to shares in the company to be voidable; and
(c) for the purpose of securing compliance with any order made
pursuant to paragraph (a) or (b), an order directing a person to
do or refrain from doing a specified act,
or, instead of making any order, the Court may declare that the conduct
was not unacceptable conduct, and, where the Court so declares, the
declaration of the Commission has no further effect.
(5) Where the Commission makes a declaration under sub-section (1)
or (3) in relation to an acquisition of shares by, or in relation to conduct
engaged in by, a person, the Court may, upon an application made by that
person, declare that the acquisition of shares, or the conduct, was not an
unacceptable acquisition or was not unacceptable conduct, as the case may
be, and, where the Court so declares, the declaration of the Commission
has no further effect.

Power of Commission to make certain orders

60A. (1) Subject to this section, where the Commission makes a
declaration under sub-section 60 (1) or (3), the Commission may, Whether
or not the Commission has previously made an order under this section in
reliance upon that declaration, by instrument in writing published in the
Gazette, make one or more of the following orders:
(a) an order restraining a specified person from disposing of any
interest in specified shares;
(b) an order restraining a specified person from acquiring any
interest in specified shares;
(c) an order restraining the exercise of voting or other rights
attached to specified shares;
 Takeoven Code Section 72

b) directing-
i) a person who is registered as the holder of shares in
respect of which an order under this section is in force
to give* a written notice of the order to each person
whom he or she knows to be entitled* to exercise a
right to vote attached to those shares;
ii) a company* not to make payment, except in the course
of winding up, of a sum due from the company in
respect ot specified shares;
iii) a company not to register a transfer or transmission of
specified shares;
iv) a company not to issue* shares to a person if the shares
were proposed to be issued because of the person's
holding shares in the company or under an offer* or
invitation* made to the person for the same reason.

2) An order may be made even if an order has previously been made.

3) The Commission may vary or cancel an order by publication in the

Gazette.

4) A copy of an order and of any order cancelling or varying it must be

served*-

a) on each person to whom it is directed; and

b) if it relates to specified shares in a company-on that company.

5) A person aggrieved by an order may apply to the Court and the Court
may vary or cancel the order.

. 6) A person who contravenes an order under this section is guilty of an

offence.
Penalty: A fine not exceeding $2,500, or imprisonment for a period
not exceeding 6 months, or both.

See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code .

60A.(l)(d) an order directing a person who is registered as the holder of

shares in respect of which an order under this section is in
force to give notice in writing of that order to any person
whom he knows to be entitled to exercise a right to vote
attached to those shares;
(e) an order directing a company not to make payment, except in
the course of winding up, of a sum due from the company in
respect of specified shares;
( f ) an order directing a company not to register the transfer or
transmission of specified shares;
(g) an order directing a company not to issue shares to a person
who holds shares in the company, being shares that were
proposed to be issued to the person by reason of his holding
shares in the company or pursuant to an offer or invitation
made or issued to him by reason of his holding shares in the
company.
(2) The Commission may, by instrument in writing published in the
Gazette, vary or revoke an order made under sub-section (1).

(3) A copy of an order under sub-section (1) and of any order by which
it is revoked or varied shall be served-
(a) on any person to whom the order is directed; and
(b) where it relates to specified shares in a company-on the
company.
(4) Where an order made under sub-section (1) is in force, a person
aggrieved by the order may apply to the Court for variation or revocation
of the order, and the Court may, if it is satisfied that it is reasonable to do
so, vary the order or revoke the order and any order by which it has been
varied.
(5) A person who contravenes or fails to comply with an order under
sub-section (1) is guilty of an offence.
Penalty: $2,500 or imprisonment for 6 months, or both.
(6)Where an offence under sub-section (5) is committed by a company,
each officer of the company who is in default is guilty of an offence.
Penalty: $2,500 or imprisonment for 6 months, or both.
Takeovers Code Section 72

7) If a company is guilty of an offence under subsection (6), each officer

of the company who is in any way knowingly concerned in the offence
is guilty of an offence.
Penalty: A fine not exceeding $2,500 or imprisonment for a period not
exceeding 6 months, or both.

8) An order under subsection (1) lapses 30 days after it is made or on a

day specified in the order, whichever is earlier.

9) The Commission may not make an order under subsection (1) unless
it has given the person to whom the order is to be directed an
opportunity to appear at a hearing and to make submissions and give
evidence to the Commission..
10) The Commiyion may not make an order under subsection (1) if the
declaration has been cancelled or is the subject of an application to the
Court under sections 74 or 71, or if a previous order made under
subsection (1)relating to the same declaration has been revoked by the
Court.

73 Power of Commission to intervene in proceedings

1) The Commission may intervene in any proceedings relating to a matter

arising under this Code.

2) Where the Commission intervenes, it becomes a party to the

proceedings.

3) The Commission may be represented by-

a) an employee; or

b) a natural person, or an officer or employee of a person, to

whom the Commission has delegated relevant functions or
powers; or

C) a legal practitioner.

* See Schedule 2.
 Companies (Acquisition ojshares) (Victoria) Code -

60A17) An order made under sub-section (1) ceases to operate at the

expiration of the period of 30 days after the order is made or at the
expiration of the day specified in the order as the day on which it ceases to
operate, whichever is earlier.
(8) The Commission shall not make an order under sub-section (1)
unless it has afforded the person to whom the order is directed an
opportunity to appear at a hearing before the Commission and to make
submissions and give evidence to the Commission in relation to the matter.
(9) The Commission is not empowered to make an order under sub-
section (1) in reliance on a declaration made by the Commission if-
(a) where the declaration was made under sub-section 60 (1) in
relation to an acquisition of shares-an application has been
made to the Court under section 45 in relation to that
acquisition as mentioned in sub-section 60 (2);
(6) where the declaration was made under sub-section 60 (3)-an
application has been made to the Court under sub-section 60
(4); or
(c) an order made in reliance on that declaration has been revoked
by the Court under sub-section (4).
Power of Commission to intervene in proceedings
61 (1) The Commission may intervene in any proceeding relating to a
matter arising under this Code.
(2) Where the Commission interevenes in any proceeding referred to
in sub-section (I), the Commission shall be deemed to be a party to the
proceeding with all the rights, duties and liabilities of such a party.
(3) Without limiting the generality of sub-section (2), the Commission
may appear and be represented in any proceeding in which it wishes to
intervene pursuant to sub-section (1)-
(a) by an employee of the Commission;
(6) by a natural person to whom, or by an officer or employee of a
person to whom or to which, the Commission has delegated
its functions and powers under this Code or such of those
functions and powers as relate to a matter to which the
proceeding relates; or
(c) by solicitor or counsel.
Takeovers Code Section 74

74 Powers of Court in relation to prohibited acquisition of shares

1) If a person has acquired* shares* in contravention of section 1, the

Court, on the app1icatio:l of the Commission, the company*, a member
of the company or the person from whom the shares were acquired,
may make orders in relation to all or any of the shares, including any
of the following orders:

a) restraining the person who acquired them from disposing* of

an interest in them;

b) restraining the exercise of any voting or other rights attached

to them;

C) directing the company not to make payment, or to defer making

payment, of any sum due in respect of them;

d) directing the disposal of an interest in them;

e) vesting them or an interest in them in the Commission;

f) directing the company not to register a transfer or transmission

of them;

g) requiring any exercise of the voting or other rights attached to

them to be disregarded;

h) cancelling or declaring voidable an offer or arrangement in

relation to them;

i) to secure compliance with any other order under this section-

directing the company or some other person to do or not do a
specified act.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code .

Orders where prohibited acquisitions take place

45. (1) Where a person has acquired shares in a company in contravention
of section 11, the Court may, on the application of the Commission, the
company, a member of the company or the person from whom the shares
were acquired, make such order or orders as it thinks fit, including but
without limiting the generality of the foregoing, one or more of the
following orders:
(a) an order restraining the person who acquired the shares from
disposing of, or of any interest in, the shares or such of the
shares as are specified in the order;
(b) an order restraining the exercise of any voting or other rights
attached to the shares or such of the shares as are specified in
the order;
(c) an order directing the company not to make payment, or to
defer making payment, of any sum or sums due from the
company in respect of the shares or such of the shares as are
specified in the order;
(d) an order directing the disposal of, or of any interest in, the
shares or such of the shares as are specified in the order;
(da) an order vesting in the Commission-
(i) the shares, or such of the shares as are specified in the
order; or
(ii) any interest in the shares or in such of the shares as are
specified in the order;
(e) an order directing the company not to register the transfer or
transmission of the shares or such of the shares as are specified
in the order;
( f ) an order that any exercise of the voting or other rights attached
to the shares, or such of the shares as are specified in the order,
be disregarded;
Tuk80vem Cod8 Section 74
- - - - .

2) If the Court is satisfied that a person is entitled* to shares because an

associate* has a relevant interest* in those shares that was acquired
through the acquisition of shares (whether in the company or in another
corporation) within 6 months before the application was filed, then, in
deciding whether the acquisition contravened section 1, proof of these
matters is prima facie evidence that the associate was an associate of
the person immediately after the acquisition.

3) The Court must not make an order, except an order restraining the
exercise of voting rights or requiring their exercise to be disregarded,
if it is satisfied that-

a) the contravention of section 1 by the person who acquired*

the shares was due to inadvertence or mistake or to ignorance
of a relevant fact or occurrence (other than ignorance or
mistake of law); and

6) in the circumstances, the contravention should be excused.

See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Caak
- -

4Sa(l)(f a) an order cancelling a contract, arrangement or offer for or in

connection with the acquisition of the shares, or of such of the
shares as are specified in the order;
(fb) an order declaring a contract, arrangement or offer for or in
connection with the acquisition of the shares, or of such of the .
shares as are specified in the order, to be voidable;
(g) for the purpose of securing compliance with any order referred
to in any of the preceding paragraphs, an order directing the
company or any other person to do or refrain from doing a
specified act.
(2) Where, at the hearing of an application under sub-section (I), it is
proved to the satisfaction of the Court that-
(a) a person is entitled to shares in a 'company by reason that
another person who is, by virtue of sub-section 7 (4), an associate
of the first-mentioned person has a relevant interest in those
shares; and
(b) that other person became entitled to that relevant interest by
reason of an acquisition of shares (whether in that company or
in another corporation) that took place within 6 months
immediately preceding the filing of the application with the
Court,
then, in determining for the purposes of the application whether the
acquisition referred to in paragraph (b) of this sub-section was made in
contravention of section 11, the proof to the satisfaction of the Court of
the matters mentioned in paragraphs (a) and (b) of this sub-section
constitutes prima facie evidence that the other person was, for the purposes
of sub-section 7 (3), an associate of the first-mentioned person immediately
after the acquisition took place.
(3) The Court shall not make an order under this section, other than
an order referred to in paragraph (1) (b) or (n, if it is satisfied-
(a) that the contravention of section 11 by the person who acquired
the shares was due to his inadvertence or mistake or to his not
being aware of a relevant fact or occurrence; and
(b) that, in all the circumstances, the contravention ought to be
excused.
Takeovers Code Seaion 75

75 Miscellaneous provisions relating to powers of Court under this Division

1) The Court may make* an order under this Division only if it is satisfied
that the order would noi unfairly prejudice any person.

2) The Court may direct that notice of an application for the making* of
an order be given* or published.

3) The C w r t may make an interim order except under section 64 but, if

the applicant is the Commission, the interim order must not be
conditional on an undertaking about damages.

4) An order or interim order may include any incidental or consequential

provisions.

5) An order directing the disposal* of an interest* in a share*+ may

provide-

a) for the disposal to be made within a time and subject to

conditions, including a condition that the disposal is not to be
made to a particular person or to a person in a particular
class*; or

b) for a specified person to pay the company* any profit made by

the person in connection with the disposal; or

C) for a specified person to hold the interest as a trustee for the

beneficial owner.

6 ) The Court may order that, if an interest in a share is not disposed of in

accordance with an order, the interest vests in the Commission.

* See Schedule 2.
+ See subsection (11).

194
 Companies (Acquisition of Shares) (Victoria) Code

Miscellaneous provisions relating to orders

49. (1) The Court shall not make an order under section 45, 46,47,48,
57 or 60 if it is satisfied that the order would unfairly prejudice any person.
(2) The Court may, before making an order under section 45, 46, 47,
48, 57 or 60, direct that notice of the application be given to such persons
as it thinks fit or direct that notice of the application be published in such
manner as it thinks fit, or both.
(2A) Where an application is made to the Court for an order under
section 45, 47,48, 57 or 60, the Court may, if in the opinion of the Court
it is desirable to do so, before considering the application, grant an interim
order, being an order of the kind applied for that is expressed to have effect
pending the determination of the application, and an interim order so
made shall, for the purposes of sub-sections (3), (7) and (8) of this section,
be taken to be an order under section 45,47,48,57 or 60, as the case may
be.
(2B) Where the Commission makes an application to the Court for the
making of an order under section 45,47,48, 57 or 60, the Court shall not
require the Commission or any other person, as a condition of granting an
interim order under sub-section (2A), to give any undertakings as to
damages.
(3) An order under section 45, 46, 47, 48, 57 or 60 may include such
ancillary or consequential provisions as the Court thinks just.
(4) Without limiting the nature of the orders that may be made by the
Court under section 45, 46, 47 or 60 directing the disposal of, or of an
interest in, a share in a company, such an order may include one or more
of the following provisions:
(a) a provision that the disposal shall be made within such time
and subject to such conditions (if any) as the Court thinks fit,
including, if the Court thinks fit, a condition that the disposal
shall not be made to a particular person or persons or to
persons included in a particular class or classes of persons;
(6) a provision that a person specified in the order is liable to pay
to the company an amount equal to the amount of any profit
made by the person as a result of, or in connection with, the
disposal of the shares;
(c) a provision that a person specified in the order shall, for all
purposes connected with the disposal of the shares, be deemed
to hold the shares as a trustee for the beneficial owner of the
shares.
Takeovers Code Section 75

7) The Court may rescind, vary, discharge or suspend the operation of an

order or interim order.

8) A person who contravenes an order or an interim order is guilty of an

offence.

9) If the person is a corporation, an officer of the corporation who was in

any way knowingly concerned in the contravention is guilty of an
offence.

10) The penalty for an offence is a fine not exceeding $1,000, or

imprisonment for a period not exceeding 3 months, or both.

11) In the application of this section in relation to an order under section

65, "share" includes a non-voting share, a convertible note* and a
renounceable option*.

Note. Original 49: unnecessary rspeh'tion in

ms-~ef6*enawmdns un& on'gtgrnal46 are
the only excprion in d a t b to
~ interim orders.

* See Schedule 2.
 Companies (Acguisition of Shares) (Viema) Codc

49. (5) The Court may direct that, where a share or an interest in a share
is not disposed of in accordance with an order of the Court under section
45, 46, 47 or 60, the share or interest in the share shall vest in the
Commission.
(7) The Court may rescind, vary or discharge an order made by it
under section 45,46,47,48,57 or 60 or suspend the operation of such an
order.
(8) A person who contravenes or fails to comply with an order under
section 45,46,47,57 or 60 that is applicable to him is guilty of an offence.
(9) Where an offence under sub-section (8) is committed by a
corporation, any officer of the corporation who is in default is guilty of an
offence.
(10) The penalty for an offence arising under this section is a fine not
exceeding $1,000 or imprisonment for a period not exceeding 3 months,
or both.
(11) Sub-sections (8) and (9) do not affect the powers of the Court in
relation to the punishment of contempts of the Court.
(12) In the application of a provision of this section in relation to orders
under section 47, the expression "share" has, in that provision, the meaning
given to that expression by sub-section 47 (2).
Takeovers Code Section 76

76 Powers of Commission in relation to interests vested in it

If an interest* in a share*vests in the Commission-

a) the Commission may get in or dispose* of it, subject to any

direction of the Court; and

b) section 462 (except subsection (1)) of the Companies (Victoria)

Code applies with any necessary modifications; and

C) sections 463 and 464 of the Companies (Victoria) Code apply

as they apply in relation to property vested in the Commission
by Part XII, Division IV, Subdivision F of that Code.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victma) Code

49. (6) Where a share or an interest in a share vests in the Commission by

virtue of an order under section 45, 46, 47 or 60 or of a direction under
sub-section (5) of this section-
(a) the Commission may, subject to any directions of the Court,
get in, sell or otherwise dispose of, or deal with, the share or
interest as it sees fit;
(b) the provisions of section 462 of the Companies (Victoria) Code
(other than sub-section 462 (1) of that Code) apply in relation
to the share or interest as if-
(i) a reference in those provisions to the power of the
Commission under sub-section 462 (1) of that Code, or to
the power conferred upon the Commission by sub-section
462 (1) of that Code, were a reference to the power
conferred on the Commission by paragraph (a) of this
sub-section;
(ii) a reference in those provisions to property, or to an estate
or interest in property, were a reference to the share or
interest; and
(iii) the reference in sub-section 462 (4) of that Code to any
power conferred on the Commission by Subdivision F of
Division 4 of Part XI1 of that Code included a reference
to the power conferred on the Commission by paragraph
(a) of this sub-section; and
(c) sections 463 and 464 of that Code apply in relation to the share
or interest in like manner as they apply in relation to property
vested in the Commission by Subdivision F of Division 4 of
Part XI1 of that Code.
Takeovers Code Section 77

Division 3-Service and Publication

77 Approved manner of sending documents

1) The Commission may by written notice-

a) direct a person to send*; or

b) approve a person sending,

a document that the person proposes to send.

2) A person sends a document in an approved manner if that person sends

it as directed or approved by the.Commission or, if there is no direction
or approval, as prescribed.
-

78 Service of documents and publication of notices

1) A document that does not have to be signed may be served* on a

securities exchange* by sending* a message to the effect of the
document by telegraph, telex, facsimile or other similar means of
communication.

2) A document that cannot be served on a securities exchange or lodged

with the Commission on a particular day because it is not a trading day
of the exchange or because the office of the Commission is not open
on that day may be served on the next trading day or day on which the
office is open.

3) A copy of a notice required to be served on a securities exchange or

lodged with the Commission need not include the name and address
of the recipient of the notice.

4) A person complies with a requirement to publish a notice in a newspaper

even if, because of circumstances beyond the person's control (other
than ignorance or mistake of law), it is not published in accordance
with the requirement, provided that the person did everything within
his or her control to have it published and had it published as soon
afterwards as possible,

* See Schedule 2.
 Companies (Acquisition of Shares) (Victmia) Code

8A.(3) The Commission may, on application by a person, approve, by

instrument in writing served on the person, the dispatch by the person in
a specified manner of-
(a) a specified document that the person proposes to dispatch
under this Act; or
(b) documents included in a specified class of documents that the
person proposes to dispatch under this Code.
(4) Notwithstanding sub-section (I), a person who, before the
commencement of section 7 of the Companies and Securities Legislation
(Miscellaneous Amendments) Act 1985 of the Commonwealth, dispatched
a document in a manner approved by the Commission shall be deemed,
for the purposes of this Code as in force after that commencement, to have
dispatched the document in an approved manner.

Service of documents and publication of notices

56. (1) Where a document (not being a document that is required to be
signed) is required by a provision of this Code or of the regulations to be
served on a securities exchange, the document may be served by sending
to the securities exchange, by telegraph, telex, facsimile service or other
similar means of communication, a message to the effect of the document,
(2) Where a document is required by a provision of this Code or of the
regulations to be served on a securities exchange or lodged with the
Commission on a particular day-
(a) if that day is not a trading day of that securities exchange-the
document shall be served on that securities exchange on the
next day that is a trading day of that securities exchange; or
(b) if the office of the Commission is not open on that day-the
document shall be lodged at that office on the next day on
which that office is open.
(3) Where a person is required by a provision of this Code to lodge with
the Commission or serve on a securities exchange a copy of a notice
dispatched by the person, it is not necessary for the copy to include the
name or address of the person to whom the notice was dispatched.
(4) Where by a provision of this Code a person is required to cause a
notice to be published in a newspaper and, due to circumstances beyond
his control, the notice is not published in accordance with the provision,
the provision shall be deemed to have been complied with if the person-
(a) did all things that would, but for those circumstances, have
resulted in publication of the notice in accordance with the
provision; and
(6) caused the notice to be published on the first practicable date
after those circumstances ceased to exist.
Takeovers Code Section 79

Division 4-General
79 Commencement

This Code begins on the same day as the Companies (Acquisition of Shares)
(Application of Laws) Act 1981.

80 Agreement

This Code is to be read together with the agreement made on 22 December

1978 between the Commonwealth and the States in relation to a proposed
scheme for the cooperative regulation of companies and the securities
industry or with that agreement as amended or affected by a later agreement.

81 Code subject to other Acts

This Code operates in accordance with the Companies (Acquisition of Shares)

(Application of Laws) Act 1981 and with the Companies and Securities
(Interpretation and Miscellaneous Provisions) (Application of Laws) Act 1981

82 Persons to whom Code applies

This Code.applies in relation to-

1) a) natural persons, whether Australian citizens or not and whether

resident in Victoria or Australia or not;

b) bodies corporate or unincorporate, whether incorporated or

carrying on business in Victoria or Australia or not; and

C) acts and omissions, whether in Victoria or Australia or not.

2) This section does not affect the definition of "company" in subsection

5 (1) of the Companies (Victoria) Code.

* See Schedule 2.
 ,Cmnpanies (Acquisition of Shares) (Victoria) Code

Commencement
2. This Code comes into operation on the day on which the Conrpanies
(Acquisition of Shares) (Application of Laws) Act, 1981 comes into
operation.

Agreement
3. This Code shall be read and construed together with the agreement
made on 22 December 1978 between the Commonwealth and the States
in relation to a proposed scheme for the co-operative regulation of
companies and the securities industry or, if that agreement is or has been
amended or affected by another agreement, that agreement as so amended
or affected.

Code subject to Act.

4. This Code has effect subject to and in accordance with the Companies
(Acquisition of Shares) (Application of Laws) Act 1981.
Interpretation
5. This Code has effect subject to and in accordance with the Companies
and Securities (Interpretation and Miscellaneous Provisions) (Application
of Laws) Act, 198 1.

Persons to whom Code applies

10. (1) This Code applies to and in relation to all natural persons,
whether resident in Victoria or in Australia or not and whether Australian
citizens or not, and to all bodies corporate or unincorporate, whether
incorporated orcarrying on business in Victoria or in Australia or not, and
extends to actsdone or omitted to be done outside Victoria, whether in
Australia or not.
(2) Nothing in sub-section (1) extends the definition of "company" in
section 6 so as to include a body corporate that is not incorporated in
Victoria.
Takwwm Cotla Schedule 2

SCHEDULE 1
[content of Part A, Part B, Pan C and Part D statements
-not reproduced]

SCHEDULE 2
Definitions
1 General

acquires, in relation to shares in a company, means acquires

a) a relevant interest* in them as a result of a transaction*

entered* into by or for the person in relation to securities; or

b) an interest in securities and, as a result, some other person

acquires a relevant interest in the shares.

acquisition-see acquires.

associate-see clause 2 of this Schedule.

associated-see associate.

businesr rules means rules, regulations or by-laws (other than listing rules)
made by a securities exchange* or contained in its constituent documents
governing the activities or conduct of-

a) the securities exchange; or

b) its members; or

c) other persons in relation to the stock market of that exchange.

* See this Schedule.

 Companies (Acquisition of Shares) (Victoria) Code

SCHEDULE

(Not reproduced)

Provisions relating to acquisition and disposal of, and entitlement to,

shares, and associated persons
7. (1) For the purposes of this Code, a person shall be taken to acquire
shares in a company (in this sub-section referred to as the "shares
concerned") if, and only if-
(a) he acquires a relevant interest in the shares concerned as a
direct or indirect result of a transaction entered into by him or
on his behalf in relation to those shares, in relation to any
other securities of that company or in relation to securities of
any other corporation; or
(6) he acquires any legal or equitable interest in securities of that
company or in securities of any other corporation and, as a
direct or indirect result of the acquisition, another person
acquires a relevant interest in the shares concerned.

6. "business rules", in relation to a securities exchange, means rules,

regulations, by-laws-
(a) governing the activities or conduct of the securities exchange
or of its members; or
(b) governing the activities or conduct of other persons in relation
to the stock market of the securities exchange, being rules,
regulations or by-laws made by the securities exchange or
contained in any of the constituent documents of the securities
exchange, but does not include rules, regulations or by-laws
that are listing rules of the securities exchange;
Takeovers Code Schedule 2

class means all the shares* in a company*, if the shares have not been
divided into classes.

company means a company, or a body corporate with share* capital,

incorporated in Victoria, and includes an unincorporated body declared by
the Commission by notice published in the Gazette to be a corporation or
body corporate.

convertible note includes a note issued by a company* that provides-

a) that the amount of the loan to the company to which the note
relates is to be or may be-

i) converted into shares* by allotment or otherwise; or

ii) redeemed, repaid or satisfied by paying-up the balance
unpaid on shares; or

b) that the holder or owner of the note is to have or may have a

right or option to have someone acquire* shares by allotment
or otherwise.

corresponding law means the equivalent legislation of a State or Territory.

defeating condition means a condition under which a contract-

a) does not result* from acceptance until the condition is fulfilled;
or
6) is rescinded, or may be rescinded by the offeror*, if the
condition is fulfilled.

* See this Schedule.

 %ornwnies (Acquisition of Shares) (Victoria) Code

Other interpretative and evidentiary provisions

8. (1) For the purposes of this Code, where the shares in a company
are not divided into 2 or more classes, those shares shall be deemed to
constitute a class.
6. "company" means a company as defined by sub-section 5 (1) of the
Companies (Victoria) Code and includes a body corporate incorporated in
Victoria that has a share capital;
"convertible note" has the same meaning as in Division 3A of Pan I11 of
the Income Tax Assessment Act 1936 of the Commonwealth as amended
and in force for the time being;

"prescribed conditiori", in relation to a take-over offer, means-

(a) a condition that will, in circumstances referred to in the
condition, result in the rescission of, or entitle the offeror to
rescind, a contract that results from an acceptance of the offer;
or
(b) a condition that prevents a binding contract from resulting
from an acceptance of the offer unless or until the condition is
fulfilled;
 defined matter means a matter relating to the affairs of, or marketable
securities issued* or to be issued by-

a) the target company* or a related corporation; or

b) the offeror* or a related corporation; or

c) in relation to the same target company-any other offeror or

a related corporation.

defined occurrence means a target company* or subsidiary-

a) having a constituent document altered in a way mentioned in

subsection 121 (1) of the Cornpanics (Victmia) CCak;or

6) resolving to reduce its share capital; or

c) making* an allotment of, or granting an option to subscribe

for, any of its shares* or agreeing to make such an allotment
or grant; or

d) issuing* or agreeing to issue convertible notes*; or

e) disposing* or agreeing to dispose of the whole or a substantial

part of its business or property; or

f) charging or agreeing to charge the whole or a substantial part

of its business or property; or

g) resolving to be wound up; or

* See this Schedule.

 Companies (Acquisition of Shares) (Victoria) Codc

6. "prescribed occurrence", in relation to a target company, means-

(a) any one or more of the provisions of the constituent documents
of the target company 'or of a subsidiary of the target company
being altered in any of the ways mentioned in sub-section 121
(1) of the Companies (Victoria) Code;
(b) the target company or a subsidiary of the target company
resolving to reduce its share capital in any way;
(c) the target company or a subsidiary of the target company
making an allotment of, or granting an option to subscribe for,
any of its shares, or agreeing to make such an allotment or
grant such an option;
(4 the target company or a subsidiary of the target company
issuing, or agreeing to issue, convertible notes;
(e) the target company or a subsidiary of the target company
disposing, or agreeing to dispose, of the whole, or a substantial
part, of its business or property;
( f ) the target company or a subsidiary of the target company
charging, or agreeing to charge, the whole, or a substantial
part, of its business or property;
(g) the target company or a subsidiary of the target company
resolving that it be wound up;
Takeovers Code Schedule 2

h) having a provisional liquidator appointed to it; or

i) being ordered by a court to be wound up; or

11 being placed under official management; or

k) having a receiver, or a receiver and manager, appointed in

relation to the whole or a substantial part of its property.

disposal-see disposes.

disposes, in relation to shares*, means ceasing to have a relevant interest*.

document, in section 60, includes a disc, tape, cinematograph film or other

article from which sound or images can be reproduced.

entering into a transaction, in relation to shares*, includes-

a) entering into or becoming a party to an understanding or

undertaking of any kind in relation to the shares*; and

b) exercising an option to have the shares allotted.

entitled-see shares, in relation to a person's entitlement.

exchange-see stock exchange, home stock exchange, member of the home

stock exchange, notifiable securities exchange.

forecast-see profit forecast.

gave-see give.

gives includes causes to be given.

* See this Schedule.

 Companies (Acquisition of Shares) (Victoria) Code

6. (h) the appointment of a provisional liquidator of the target

company or of a subsidiary of the target company;
the making of an order by a court for the winding up of the
target company or of a subsidiary of the target company;
(k) the target company or a subsidiary of the target company being
placed under official management; or
( I ) the appointment of a receiver, or a receiver and manager, in
relation to the whole, or a substantial part, of the property of
the target company or of a subsidiary of the target company;

7. (2) For the purposes of this Code, a person shall be taken to dispose of
shares in a company if, and only if, having a relevant interest in those
shares, he ceases to have a relevant interest in those shares as a result of
the doing of any act, the entering into of any transaction or the occurrence
of any circumstance.

8. (7) In this Code, a reference to entering into a transaction in relation

to shares includes-
(a) a reference to entering into or becoming a party to an
agreement, arrangement, understanding or undertaking,
whether formal or informal and whether express or implied,
in relation to shares; and
(6) a reference to exercising an option to have shares allotted.
Takmvbnr' .Code . -
- - - Scheduk 2

home stock exchange means the stock exchange designated by the Australian
Stock Exchange Limited as the home exchange of a company.

interest-see interest in a share, relevant interest.

interest in a share includes a share*.

invitation does not include an offer*.

issues includes causes to be issued.

issued-see issue.

listed company means a company* which is on the official list of a securities

exchange*.

listing rules means rules, regulations or by-laws relating to-

a) the admission of persons to the official list of a securities

exchange*; or

b) the activities of persons who are admitted to the list; or

4 the removal of persons from the list,

* See this Schedule.

 Companies (Acquisition of Shares) (Victoria) Code

6. "home stock exchange", in relation to a stock exchange listed

company, means the stock exchange designated to the company for the
purposes of the exchange's listing rules as the company's Home Exchange;
8.(18) A reference in this section to a member of the stock exchange
that is the home stock exchange in relation to a company shall be construed
as including a reference to a member of another stock exchange who is
entitled to trade in securities on the stock market of the first-mentioned
stock exchange.

6. "invitation", except in the definition of 'stock market', means a

statement, however expressed, that is not an offer but expressly or impliedly
invites a holder of shares to offer to dispose of shares or a holder of a right,
being a right to acquire a share or an interest in a share under an option,
to dispose of the right;

"listed company" means a company that has been admitted to the

official list of a securities exchange and has not been removed from that
official list;

"listing rules", in relation to a securities exchange, means rules,

regulations or by-laws governing or relating to-
(a) the admission to, or removal from, the official list of the
securities exchange of bodies corporate, governments,
unincorporate bodies or other persons for the purposes of the
quotation on the stock market of the securities exchange of
securities of, or made available by, bodies corporate,
governments, unincorporate bodies or other persons and for
other purposes; or
(6) the activities or conduct of bodies corporate, governments,
unincorporate bodies and other persons who are admitted to
that list, whether those rules, regulations or by-laws-
(c)are made by the securities exchange or are contained in any of
the constituent documents of the securities exchange; or
(d) are made by another person and adopted by the securities
exchange;
Takeovers Code Schedule 2

made-see make.

makes includes causes to be made.

member, in relation to the stock exchange* that is the home stock exchange*
of a company*, includes a member of another stock exchange who is
entitled* to trade in securities on the stock market of the home stock
exchange.

member of a home stock exchange*, includes a member of another stock

exchange who is entitled* to trade in securities on the stock market of that
exchange.

notifiable securities exchange means the home stock exchange* of a

company* or a securities exchange* (other than a stock exchange) on whose
official list a company is entered.

odd lot means a parcel of shares* that is less than a marketable parcel.

offer means an offer* under a takeover scheme* or a takeover

announcement*.

offer period means the period during which offers* made* in accordance
with any provision of this Code remain open, and, in relation to an offer
that has been accepted, the period during which the offer would have
remained open, if it had not been accepted.

* See this Schedule.

 Companies (Acquisition of Shares) (Victoria) Code

6. "marketable parcel", in relation to shares in a listed company, means

a marketable parcel of shares in that listed company within the meaning
of the relevant business rules or listing rules of a notifiable securities
exchange in relation to that listed company;

17.(18) A reference in this section to a member of the stock exchange

that is the home stock exchange in relation to a company shall be construed
as including a reference to a member of another stock exchange who is
entitled to trade in securities on the stock market of the first-mentioned
stock exchange.
(19) A reference in this section to a representative of a member of a
stock exchange includes a reference to-
(a) an employee of the member; and
(b) if the member is a partner in a partnership that carries on a
business of dealing in securities-
(i) another partner in the partnership; or
(ii) an employee of the partnership.

6. "non-voting share", in relation to a company, means an issued share

in the company that is not a voting share;

"notifiable securities exchange", in relation to a listed company,

means a securities exchange, being-
(a) in the case of a stock exchange listed company-the home
stock exchange of the company; or
(b) in any case-a securities exchange (not being a stock exchange)
to whose official list the company has been admitted and from
whose official list the company has not been removed;

8.(3) Unless the contrary intention appears, a reference in this Code to

the period during which an offer under a take-over scheme or made by
virtue of a take-over announcement remains open shall, in the case of an
offer that is accepted, be construed as a reference to the period during
which the offer would have remained open if it had not been accepted.
Takeovers Code Schedule 2

offeror includes a person who sends* or proposes to send an offer* himself

or herself or by an agent or nominee, and includes either or any of 2 or
more persons who make* or propose to make an offer together.

Part A statement means a statement in writing that complies with Part A of

Schedule 1.

Part B statement means a statement in writing that complies with Part B of

Schedule 1.

Part C statement means a statement in writing that complies with Part C of

Schedule 1.

Part D statement means a statement in writing that complies with Part D

of Schedule 1.

period-see offer period.

previous corresponding law* may include a provision of the Companies

Act 1961 or an equivalent law of another State or territory.

* See this Schedule.

216
 Compm,ies (Acquisition of Shares) (Victotia) Code

6. "offeror" means-
(a) a person who dispatches or proposes to dispatch a take-over
offer, whether he dispatches or proposes to dispatch the offer
himself or by an agent or nominee; or
(6) 2 or more persons who together dispatch or propose to dispatch
a take-over offer, whether they dispatch or propose to dispatch
the offer themselves or by an agent or nominee;
7. (6) In this Code-
(a) a reference to an offeror or an on-market offeror shall, if 2 or
more persons constitute an offeror or an on-market offeror, be
construed as a reference to those persons or either or any of
them; and (6) a reference to a person associated with an offeror
or an on-market offeror shall, if 2 or more persons constitute
an offeror or an on-market offeror, be construed as a reference
to a person associated with those persons or with either or any
of them.

6. "on-market offeror" means-

(a) a person who makes, or proposes to make, offers to acquire
shares in accordance with section 17; or
(6) 2 or more persons who together make, or propose to make,
offers to acquire shares in accordance with section 17;

"Part A statement" means a statement in writing that complies with

the requirements of Part A of the Schedule and of sub-section 16 (2A);
"Part B statement" means a statement in writing that complies with the
requirements of Part B of the Schedule;
"Part C statement" means a statement in writing that complies with the
requirements of Part C of the Schedule;
"Part D statement" means a statement in writing that complies with the
requirements of Part D of the Schedule;

6a. In this Code-

(a) a reference to a previous law, or provision of a previous law, or
previous enactment, of Victoria or of the State corresponding
to, or to a provision of, this Code includes a reference to, or to
a provision of, the Companies Act, 1961; and
(b) a reference to a previous law, or provision of a previous law or
previous enactment, of a State other than Victoria or of another
State corresponding to, or to a provision of, this Code includes
a reference to, or to a provision of, that law of that state
corresponding to the Companies Act, 1961.
 Takeovers Code Schedule 2

profit forecast means a statement that contains a forecast as to profits or

profitability of-

a) the target company*; or

b) a corporation that is the offeror* or prospective offeror; or

C) a corporation that is associated* with a company or corporation

mentioned in paragraph (a) or (b); or

d) a business or income-producing activity of a kind engaged in

by the target company or by a corporation as mentioned in
paragraph (b) or (c); or

el an industry of which that business or income-producing activity

forms pan.

quotation includes displaying or providing on a stock market of a securities

exchange* information concerning the consideration for offers* or
invitations* to sell, buy or exchange securities;

relevant interest-see clause 3 of this Schedule.

renounceable option means an assignable option to have an allotment of

shares* made to the holder of the option.

* See this Schedule.

 Companies (Acquisition of Shares) (Victoria) Code

37. (4) A reference in this section to a forecast in respect of the profits

or profitability of a company or other corporation includes a reference to a
forecast in respect of the profits or profitability of any business or in-Come
producing activity of a kind engaged in by that company or other
corporation or of any industry of which a business or income-producing
activity engaged in by that company or other corporation forms part.

6 . "quotation", in relation to securities, in relation to a stock market of

a securities exchange, includes the displaying or providing, on a stock
market of the securities exchange, of information concerning-
(a) in a case where offers to,sell, purchase or exchange the securities
at particular prices, or for particular consideration, are made
or accepted on that stock market-those prices or
that consideration;
(b) in a case where offers or invitations are made on that stock
market, being offers or invitations that are intended, or may
reasonably be expected, to result, whether directly or indirectly,
in the making or acceptance of offers to sell, purchase or
exchange the securities at particular prices, or for particular
consideration-those prices or that consideration; or
(c) in any case-the price at which, or the consideration for which,
particular persons, or particular classes of persons, propose, or
may reasonably be expected, to sell, purchase or exchange the
securities;
"recorded", in relation to a dealing in shares in a listed company,
means recorded by a securities exchange;

"renounceable option" means an option to have an allotment of shares in

a corporation made to the holder of the option, being an option that is
capable of being assigned;
Takeovers Code Schedule 2

representative of a member includes an employee, or a partner, in the

member's business of dealing in securities.

result includes an indirect result.

securities exchange (see also notifiable securities exchange) means a body

corporate (whether incorporated in Victoria or not) declared by the
regulations to be a securities exchange*.
sends includes causes to be sent.

sent-see sends.

serves includes causes to be served.

shares, in relation to a number or YO of shares* in a company* whose share

capital consists wholly or partly of stock, includes the equivalent amount of
stock.

shares*, in relation to a person's entitlement, includes-

a) those in which the person has a relevant interest*; or

b) if the person is not a nominee corporation approved by a

certificate given by the Commission under this Code or a
corresponding law*-those in which an associate* has a
relevant interest*.

stock exchange (see also home stock exchange) means a body corporate
(whether incorporated in Victoria or not) that is declared by the
regulations to be a stock exchange.

* See this Schedule.

 Companies (Acquisitwn of Shares) (Victoria) Code

17. (19) A reference in this section to a representative of a member of a

stock exchange includes a reference to-
(a) an employee of the member; and
(6) if the member is a partner in a partnership that carries on a
business of dealing in securities-
(i) another partner in the partnership; or
(ii) an employee of the partnership.

"securities exchange7'means a body corporate (whether or not incorporated

in Victoria) that is declared by the regulations to be a securities exchange
for the purposes of this Code;

8.(4) In relation to a company the whole or a portion of the share

capital of which consists of stock, a reference in this Code to a number of
shares (including a number expressed as a percentage) shall, in relation to
an amount of stock, be construed as a reference to the amount of stock that
represents that number of shares.
7. (3) For the purposes of this Code, the shares in a company (in this
sub-section and sub-section (4) referred to as the 'relevant company') to
which a person (in this sub-section and sub-section (4) referred to as the
"person concerned"), being the relevant company or any other person, is
entitled include-
(a) shares in which the person concerned has a relevant interest;
and
(b) except where the person concerned is a nominee corporation
in respect of which a certificate by the Commission is in force
under sub-section (8) or under the provision of a law of a
participating State or of a participating Territory that
corresponds with that sub-section-shares in which a person
who is an associate of the person concerned has a relevant
interest.

6. "stock exchange" means a body corporate (whether or not

incorporated in Victoria) that is declared by the regulations to be a stock
exchange for the purposes of this Code;
"stock exchange listed company" means a company that has been
admitted to the official list of a stock exchange and that has not been
removed from that official list; and
Takeovers Code Schedule 2

takeover announcement means an announcement in accordance with

sections 34 to 40 of this Code.

takeover offer means an offer in accordance with sections 3, 4, 7 and 8 of

this Code.

takeover scheme means a scheme in accordance with sections 3,4,7 and 8

of this Code.

target company means a company* shares* in which are proposed to be

acquired* by an offeror* or person who proposes to be an offeror.

trading includes making* or accepting offers* or invitations* to sell, purchase

or exchange securities.

transaction-see entering into a transaction.

* See this Schedule.

 Cpmpanies (Acquisition of Shares) (Victoria) Code

6. "take-over announcement" means an announcement made in

accordance with section 17;

"take-over offer" means an offer to acquire shares made under a take-over

scheme;

"take-over scheme" means a take-over scheme referred to in section 16;

<c
target company" means-
(a) in relation to a take-over offer-the company for the acquisition
of shares in which that offer has been, or is proposed to be,
dispatched;
(b) in relation to a take-over scheme-the company shares in
which are proposed to be acquired under the scheme; and
(c) in relation to a take-over announcement-the company in
relation to shares in which the take-over announcement has
been, or is proposed to be, made;

"trading", in relation to securities, in relation to a stock market,

includes-
(a) making or accepting on that stock market offers to sell, purchase
or exchange the securities; and
(b) making on that stock market offers or invitations that are
intended, or may reasonably be expected, to result, whether
directly or indirectly, in the making or acceptance of offers to
sell, purchase or exchange the securities;
"trading day", in relation to a securities exchange, means a day on which
a stock market of the securities exchange is open for trading in securities.
7'8k80ver~code Schedule 2

2. Associate

1) Associate, in relation to a person, means-

a) if the person is a corporation-a related corporation or a

director or secretary of either corporation; and

b) another person with whom the person has or proposes to have

an agreement or understanding of any kind-
i) by which either may exercise, control or in any way
substantially influence the exercise of any type of voting
power attached to shares* in the company* concerned;
or
ii) that is aimed at controlling or influencing the
composition of the board of directors or the conduct of
affairs of the company concerned; or
iii) under which either may acquire* from the other shares
in the company concerned; or
iv) under which either may be required to dispose* of
shares in the company concerned at the direction of
the other; or
v) that operates in any other way in relation to shares in
the company concerned; and

c) a person with whom the person is acting, or proposes to act, in

respect of the matter concerned; and

d) a person who is an associate under the regulations in respect

of the matter concerned; and

e) a person in respect of whom the person has done or proposes

to do something with a view to their becoming associated as
mentioned in paragraph (b), (c) or (d).

2) A person is not made* an associate of another by subclause (1) merely

because-

a> one gives advice to or acts for the other in a professional

capacity or a business relationship; or

* See this Schedule.

 Companies (Acquisition of Shares) (Victoria) Code

7. (4) A reference in paragraph (3) (6) to a person who is an associate of

the person concerned shall be construed as a reference to-
(a) if the person concerned is a corporation-
(i) a director or secretary of the corporation;
(ii) a corporation (including the relevant company) that is
related to the person concerned; or
(iii) a director or secretary of such a related corporation;
(b) a person (including the relevant company) with whom the
person concerned has, or proposes to enter into, an agreement,
arrangement, understanding or undertaking, whether formal
or informal and whether express or implied-
(i) by reason of which the first-mentioned person, or the
person concerned, may exercise, may directly or indirectly
control the exercise of, or may substantially influence the
exercise of, any voting power attached to shares in the
relevant company;
(ii) with a view to controlling or influencing the composition
of of the board of directors, or the conduct of affairs, of
the relevant company;
(iii) under which the first-mentioned person may acquire from
the person concerned, or the person concerned may
acquire from the first-mentioned person, shares in the
relevant company; or
(iv) under which the first-mentioned person, or the person
concerned, may be required to dispose of shares in the
relevant company in accordance with the directions of
person concerned, or of the first-mentioned person, as the
case may be;
(c) a person (including the relevant company) in concert with
whom the person concerned is acting, or proposes to act, in
relation to the acquisition or proposed acquisition of shares in
the relevant company ;
(d) a person (including the relevant company) with whom the
person concerned is, or proposes to become, associated,
whether formally or informally with a view to controlling or
influencing the composition of the board of directors, or the
conduct of affairs, of the relevant company
(e) a person (including the relevant company) with whom the
person concerned is, by virtue of the regulations, to be regarded
as associated in relation to the acquisition or proposed
acquisition of shares in the relevant company;
0 a person (including the relevant company) with whom the
person concerned is, or proposes to become, associated,
whether formally or informally, in any other way in relation
to shares in the relevant company;
Takeovers Code Schedule 2

b) one, a customer, irlstructs the other, a dealer in securities, to

acquire* shares* on behalf of the customer in the dealer's
ordinary course of business; or

C) one has sent or proposes to send* to the other an offer* under

a takeover scheme* or has made or proposes to make* offers
under a takeover announcement* in relation to shares held by
the other; or

d) one has been appointed by the other, but not for valuable
consideration, to vote as a proxy or representative at a meeting
of shareholders.

3) In relation to the shares in a company, a person may be an associate of

the company and the company may be an associate of the person.

Note. Original 7: the original contained two

definitions, one of 'associate', the other of
'associated with: There was a considerable
overlap between the two definitions. The
diflerence between the two may have served a
purpose. However, none of the Commission's
consultants was able to suggest one.
Consequently, the two definitions have been
combined in one provision in the plain English
version.

* See this Schedule.

 Companies (Acquisition of Shares) (Victoria) Code

7.(4) (g) if the person concerned has entered into, or proposes to enter
into, a transaction, or has done, or proposes to do, any other
act or thing, with a view to becoming associated with another
person (including the relevant company) as mentioned in
paragraph (b), (c), (d), (e) or (&that other person.

( 5 ) A reference in this Code other than sub-section (4) to a person

associated with another person shall be construed as a reference to-
(a) if the other person is a corporation-
(i) a director or secretary of the corporation;
(ii) a corporation that is related to the other person; or
(iii) a director or secretary of such a related corporation;
(b) where the matter to which the reference relates is a take-over
offer or take-over announcement relating to shares in a
company (including, in a case where the other person is a
company, the other person), or the extent of a power to exercise,
or to control the exercise of, the voting power attached to
voting shares in a corporation (including, in a case where the
other person is a corporation, the other person)-a person
(including the company or corporation, as the case may be)
with whom the other person has, or proposes to enter into, an
agreement, arrangement, understanding or undertaking,
whether formal or infprmal and whether express or implied-
(i) by reason of which the first-mentioned person, or the
other person, may exercise, may directly or indirectly
control the exercise of, or may substantially influence the
exercise of, any voting power attached to a share in the
company or corporation, as the case may be;
(ii) with a view to controlling or influencing the composition
of the board of directors, or the conduct of affairs, of the
company or corporation, as the case may be;
(iii) under which the first-mentioned person may acquire from
the other person, or the other person may acquire from
the first-mentioned person, shares in the company or
corporation, as the case may be; or
(iv) under which the first-mentioned person, or the other
person, may be required to dispose of shares in the
company or corporation, as the case may be, in accordance
with the directions of the other person, or of the first-
mentioned person, as the case may be;
(c) a person in concert with whom the other person is acting, or
proposes to act, in respect of the matter to which the reference
relates;
(4 a person with whom the other person is, by virtue of the
regulations, to be regarded as associated in respect of the
matter to which the reference relates;
 .Companies (Acquisition of Shares) (Victoria) Code .

7. (5) (e) a person with whom the other person is, or proposes to become,
associated, whether formally or informally, in any other way
in respect of the matter to which the reference relates; or
( f ) if the other person has entered into, or proposes to enter into,
a transaction, or has done, or proposes to do, any other act or
thing, with a view to becoming associated with a person as
mentioned in paragraph (b), (c), (d) or (e)-that last-mentioned
person.
(6) A person shall not be taken to be an associate of another person by
virtue of paragraph (4) (b), (c), (d),(t), or (g) or to be associated with another
person by virtue of paragraph (5) (b), (c), (e) or (t) by reason only that-
(a) one of those persons furnishes advice to, or acts on behalf of,
the other person in the proper performance of the functions
attaching to his professional 'capacity or to his business
relationship with the other person;
(b) without limiting the generality of paragraph (a), where the
ordinary business of one of those persons includes dealing in
securities-specific instructions are given to the person by or
on behalf of the other person to acquire shares on behalf of the
other person in the ordinary course of that business;
(c) one of those personsL
(i) has dispatched or proposes to dispatch to the other person
a take-over offer in relation to shares in a company held
by the other person; or
(ii) has made, or proposes to make, a take-over announcement
that relates to shares held by the other person; or
(4 the other person has been appointed by the first-mentioned
person as a proxy or representative to exercise, at a meeting of
members or of a class of members of a company, votes attached
to shares of which the first-mentioned person is the holder,
where the relevant interest of that person in those shares that
arises by reason of his appointment as a proxy or representative
would be disregarded under sub-section 9 (8) by reason of
paragraph(e) of that sub-section.

(7) For the purposes of paragraphs (4) (b) and (5) (b), it is immaterial
that the power of a person to exercise, control the exercise of, or influence
the exercise of, voting power is in any way qualified.
(8) The Commission may, in its discretion, issue to a nominee
corporation a certificate declaring the nominee corporation to be an
approved nominee corporation for the purposes of this section and may at
any time, in its discretion, by notice in writing to the nominee corporation,
revoke the certificate.
 TakeoversCode Schedula 2

3. Relevant Interest

1) A person has a relevant interest in a share* in a corporation if that

person has a power of any kind (however it arises and whether it may
be exercised alone or jointly, including a power that is subject to
restraint or restriction or whose exercise involves a breach or revocation
of a trust, understanding or practice) to exercise control over-

a) a right to vote attached to that share if it is a voting share; or

6) the disposal* of that share, whether or not it is a voting share.

2) A person has the same relevant interest as a body corporate if-

a) the body corporate or its directors are accustomed or under

any kind of obligation to act in accordance with the wishes of
the person in relation to the exercise of a power with respect
to a right to vote attached to a voting share or the disposal of a.
share; or

b) the person has a controlling interest in the body corporate,

including an interest that gives control of any kind (however
it arises and whether it may be exercised alone or jointly,
including control that is subject to restraint or restriction or
whose exercise involves a breach or revocation of a trust,
undertaking or practice); or

* See this Schedule.

 Companies (Acquisition of Shares) (Victoria) Code

Relevant interests in shares

9. (1) Subject to this section, a person has a relevant interest in a
share in a corporation for the purposes of this Code if that person has
power-
(a) where the share is a voting share-to exercise, or to control
the exercise of, the right to vote attached to that share; or
(b) to dispose of, or to exercise control over the disposal of, that
share whether or not it is a voting share.
(2) It is immaterial for the purposes of this section whether the power
of a person-
(a) to exercise, or to control the exercise of, the right to vote
attached to a voting share; or
(b) to dispose of, or to exercise control over the disposal of, a share,
is express or implied or formal or informal,,is exercisable alone or jointly
with another person or other persons, cannot be related to a particular
share, or is, or is capable of being made, subject to restraint or restriction,
and any such power exercisable by a person jointly with another person or
other persons shall, for those purposes, be deemed to be exercisable by
either or any of those persons.
(3) A reference in this section to power or control includes a reference
to power or control that is direct or indirect or is, or is capable of being,
exercised as a result of, or by means of, or in breach of, or by revocation
of, trusts, agreements, arrangements, understandings and practices, or any
of them, whether or not they are enforceable, and a reference in this
section to a controlling interest includes a reference to such an interest as
gives control.
(4) Without limiting the generality of sub-sections (I), (2) and (3),
where a body corporate has, or is by virtue of this section to be deemed to
have, power-
(a) to exercise, or to control the exercise of, the right to vote
attached to a voting share; or
(b) to dispose of, or to exercise control over the disposal of, a share,
and-
(c) the body corporate is, or its directors are, accustomed or under
an obligation, whether formal or informal, to act in accordance
with the directions, instructions or wishes of a person in relation
to the exercise of the power; or
(d) a person has a controlling interest in the body corporate,
that person shall, for the purpose of this section, be deemed to have the
same power in relation to that share as the body corporate has or is to be
deemed to have.
(5) Where a body corporate has, or is by virtue of this section (other
than this sub-section) to be deemed to have, power-
(a) to exercise, or to control the exercise of, the right to vote
attached to a voting share; or
Takeovers Code

C) the person or an associate* has or they together have (except

by reason only of a previous application of this paragraph) a
power referred to in subclause (1) to control the exercise of
the voting power attached to 20% (but, if a lesser % is
prescribed, that %) of the voting shares in the body corporate.

3) A person has a relevant interest in a share if the performance of an

agreement the person has made*, or the exercise of a right (whether
present or future and whether unconditional or not) or option relating
to an issued* share, would give the person a relevant interest.

4) If the person who has a relevant interest .under subclause (3) is a body
corporate and it or its directors are accustomed or under any type of
obligation to act in accordance with the wishes of a person in relation
to the exercise of the right to vote attached to that share or in relation
to its disposal, a person has a relevant interest if he or she has-
a) a controlling interest in the body corporate; or

b) power to control the exercise of the voting power attached to

the 20% (but, if a lesser % is prescribed, that %) of the voting
shares in the body corporate.

* See this Schedule.

 Companies (Acquisition ofshares) (Victmia) Code .

9. (5) (b) to dispose of, or to exercise control over the disposal of, a share,
a person (in this sub-section referred to as the 'relevant person') shall, for
the purposes of this section, be deemed to have the same power in relation
to that share as the body corporate has, or is to be deemed to have,
if-
(c) the relevant person has;
(d) a person associated with the relevant person has;
(e) persons associated with the relevant person together have; or
( f ) the relevant person and a person or persons associated with the
relevant person together have,
the power to exercise, or to control the exercise of, the voting power
attached to not less than the prescribed percentage of the voting shares in
the body corporate.
(6) Where a person-
(a) has entered into an agreement with respect to an issued share;
(b) has a right relating to an issued share, whether the right is
enforceable presently or in the future and whether on the
fulfilment of a condition or not; or
(c) has an option with respect to an issued share, and, on
performance of the agreement, enforcement of the right or
exercise of the option, as the case may be, that person would
have a relevant interest in the share,
he shall, for the purposes of this section, be deemed to have that relevant
interest in the share.
(7) For the purposes of this section, where a body corporate is to be
deemed, by virtue of sub-section (6) to have a relevant interest in a share
in a corporation and-
(a) the body corporate is, or its directors are, accustomed or under
an obligation, whether formal or informal, to act in accordance
with the directions, instructions or wishes of a person in relation
to the exercise of,or the control of the exercise of, the right to
vote attached to shares in the corporation, or in relation to the
disposal of, or the exercise of control over the disposal of,
shares in the corporation;
(b) a person has a controlling interest in the body corporate; or
(c) a person has power to exercise, or to control the exercise of,
the voting power attached to not less than the prescribed
percentage of the voting shares in the body corporate,
that person shall be deemed to have a relevant interest in that share.
 Takeovers Code Schedule 2

5) A person's relevant interest in a share is to be disregarded if-

a) the authority to exercise powers in relation to it arises from a

security given for the purposes of a transaction (except one
with an associate*) entered into in the ordinary course of the
person's ordinary business of lending money; or

6) the person has the relevant interest by reason of holding a

prescribed office; or

c) the relevant interest is as a trustee and-

i) a beneficiary has a relevant interest in the share under

an enforceable and unconditional right; or
ii) the trustee is a bare trustee apart from any question of
entitlement to remuneration from the trust; or

d) the person has authority to exercise powers as holder only

because of another person's instructions to dispose of the share
on behalf of the other person in the ordinary course of his or
her busineis of dealing in securities; or

e) the person has the relevant interest as a proxy or representative

to vote at a particular meeting of members, or of a class of
members, of a corporation, unless the person or an associate*
provided valuable consideration for the appointment.

6 ) A corporation may have a relevant interest in a share in itself.

Note. Original 9 (3): qualifies 'power' and

'control' in the same way. The substantive
provision refers to 'powers to control'. The
duplication of qualifications was thought
unnecessary.
Original 9 (1 1): creation of unnecessary
concept- built into plain English version.

* See this Schedule.

 . Companies (Acquisition of Shares) (Victoria) Code

9. (8) A relevant interest in a share shall be disregarded-

(a) if the ordinary business of the person who has the relevant
interest includes the lending of money and he has authority to
exercise his powers as the holder of the relevant interest only
by reason of a security given for the purposes of a transaction
entered into in the ordinary course of business in connection
with the lending of money, not being a transaction entered
into with a person associated with the first-mentioned person;
(6) if the relevant interest is that of a person who has it by reason
of his holding a prescribed office;
(c) if the share is subject to a trust, the relevant interest is that of a
trustee and-
(i) a beneficiary is to be deemed, by virtue of sub-section (6),
to have a relevant interest in the share by virtue of a
presently enforceable and unconditional right referred to
in paragraph (b) of that sub-section; or
(ii) the trustee is a bare trustee;
(4 if the ordinary business of the person who has the relevant
interest includes dealing in securities and he has authority to
exercise his powers as the holder of the relevant interest only
by reason of instructions given to him by or on behalf of
another person to dispose of that share on behalf of the other
person in the ordinary course of business; or
(e) if the relevant interest is that of a person who has it by reason
only of his having been appointed as a proxy or representative
to vote at a particular meeting of members, or of a class of
members, of a corporation, not being an appointment in return
for the making of which the person or a person associated with
the person provided valuable consideration.
(9) For the purposes of sub-paragraph (8) (c) (ii), a trustee shall not be
taken not to be a bare trustee by reason only of the fact that the trustee is
entitled in his capacity as a trustee to be remunerated out of the income or
property of the trust.
(9A) A corporation may, by virtue of this section, be taken or deemed,
for the purposes of this Code, to have a relevant interest in a share in the
corporation itself.
(10) A relevant interest in a share shall not be disregarded by reason
only of-
(a) its remoteness; or
(b) the manner in which i~arose.
(11) A reference in this section to the prescribed percentage is a
reference to 20% or, where a lesser percentage is prescribed by regulations
in force for the time being for the purposes of section 11, a reference to
that lesser percentage.
Takeovers Code Schedule 3

SCHEDULE 3
Acquisitions not Affected by Basic Principles+

The basic principles do not affect an acquisition-

a) under a will, by operation of law or under section 409 of the Companies

(Victoria) Code or a corresponding previous law; or

b) by allotment or purchase under-

i) a proposal whose particulars were set out in the first

prospectus issued* by a company*, if the person
acquiring* the shares* was a promoter in respect of the
prospectus; or

ii) a prospectus or an underwriting agreement or a related

sub-underwriting agreement whose particulars were set
out in a prospectus that has been registered under
Division 1 of Part IV of the Companies (Victoria) Code
or under a corresponding previous law*; or

* See Schedule 2.
+
See plain English version, 1 (2).
 Companies (Acquisition of Shares) (Victoria) Code .

Acquisitions to which section 11 does not apply

12. Section 11 does not apply to or in relation to-
(a) an acquisition of shares by will or by operation of law;
( f ) an acquisition of shares pursuant to section 409 of the
Companies (Victoria) Code or under a corresponding provision
of a previous law of the State;
(c) an acquisition of shares in a company by virtue of an allotment
made in accordance with a proposal particulars of which were
set out in a prospectus where-
(i) the prospectus was the first prospectus issued by the
company;
(ii) the person who acquired the shares was a promoter in
respect of the prospectus; and
(iii) a copy of the prospectus has been registered under Division
1 of Part IV of the Companies (Victoria) Code or under
the corresponding provisions of a previous law of the
State;
(b) an acquisition of shares by virtue of an allotment or purchase
pursuant to a prospectus-
(i) in relation to an invitation to the public to subscribe for
or purchase the shares or an offer to the public to accept
subscriptions for or to sell the shares; and
(ii) a copy of which has been registered under Division 1 of
Part IV of the Companies (Victoria) Code or under the
corresponding provisions of a previous law of Victoria;
(d) an acquisition of shares by virtue of an allotment or purchase
of shares pursuant to-
(i) an underwriting agreement particulars of which were set
out in a prospectus a copy of which has been registered
under Division 1 of Part IV of the Companies (Victoria)
Code or under the corresponding provisions of a
previous law of the State or
(ii) a sub-underwriting agreement that is related to such an
underwriting agreement,
where the prospectus contained an invitation to the public to subscribe for
or purchase the shares or an offer to the public to accept subscriptions for
or to sell the shares;
 Takeovers Code - Schedule 3

c) by allotment or purchase agreed to at a general meeting of a company

where no votes were cast on the resolution in respect of shares already
held by the person (or an associate*) to whom the shares were to be
allotted or from whom or by whom they were to be purchased; or

d) by allotment by a company that has not commenced business and has

not exercised its borrowing powers; or

e) by allotment if-

i) the directors resolve to offer to allot shares to all

registered holders of shares, or all registered holders of
voting shares, on a specified date; and

ii) the number of shares, or voting shares, offered to each

person is as nearly as practicable proportional to the
person's holding on that date; and

iii) the allotment is made-

A. as a result* of the acceptance by the person for
part or all of the shares offered; or
B. to a person as an underwriter or sub-underwriter
in respect of the allotment; or
C. if the registered address of a shareholder is not.
in Australia or in an external Territory-to a
nominee approved by the company's home stock
exchange* or, if it is not a listed company*, by
the Commission; but only if the shares are
offered for sale at a price, and on terms and
conditions, approved by the exchange or
Commission; and the shareholder is paid the
proceeds of sale after deducting expenses and
amounts payable to the company in relation to
the allotment; or

* See Schedule 2.
 ' Companies (Acquisition of Shares) (Victoria) Code .

12. (g) an acquisition of shares in a company by virtue of an allotment

or purchase where the company has agreed to the allotment or
purchase by a resolution passed at a general meeting at which
no votes were cast in relation to the resolution in respect of
any shares held by-
(i) the person to whom the first-mentioned shares were to be
allotted or by whom or from whom the first-mentioned
shares were to be purchased, as the case may be; or
(ii) a person associated with a person referred to in sub-
paragraph (11;
(e) an acquisition of shares by virtue of an allotment made by a
company that has not commenced any business and has not
exercised any borrowing power;

Pari passu allotments

14. (1) Section 11 does not prohibit the acquisition of shares in a company
pursuant to an allotment if-
(a) the requirements set out in sub-section (2) have been complied
with in relation to the allotment; and
(6) the allotment-
(i) is made to a person as a result of the acceptance by that
person of an offer made to him in accordance with
paragraph (2) (b);
(ii) is made to a person in his capacity as an underwriter or
sub-underwriter in relation to the allotment; or
(iii) is made to a nominee in accordance with sub-section (3).
(2) The requirements referred to in sub-section (1) are as follows:
(a) the directors of the company shall pass a resolution agreeing
to make available a number of shares in, or ascertained in
accordance with, the resolution for allotment to all persons
who were registered as the holders of shares in the company,
or to all persons who were registered as the holders of voting
shares in the company, on the date specified in the resolution;
(6) the company shall make an offer to each person to allot to him
such number of those shares as he agrees to subscribe for,
being a number that does not exceed the number specified in
the offer in accordance with paragraph (c); and
(c) the number of shares to be specified in an offer for the purposes
of paragraph (b) is the number that bears to the total number
of shares agreed to be made available in accordance with
paragraph (a) as nearly as practicable the same proportion as
the number of shares in the company, or the number of voting
shares in the company, as the case may be, held by the person
to whom the offer is made immediately before the date specified
in the resolution bears to the total number of shares in the
company, or the total number of voting shares in the company,
as the case may be, immediately before that date.
Takeovers Code Schedule 3

f) by a compromise or arrangement approved by the Court under Part

VIII of the Cornponies (Victtor3a) C& or

g) by the exercise of a renounceable option* or an option or right under

a convertible note,* if the acquisition of the shares, because of paragraph
(I), would not have contravened this Code if the person had acquired
the shares when the person acquired the option or note; or

h) made by the acquisition of shares by a person by that person accepting

a takeover offer where the shares were consideration for the offer; or

-
* See Schedule 2.
 .Companies (Acquisition of Shares) (Victoria) Code

14. (3) A company shall be deemed to comply with the requirements of

sub-section (2) in relation to the holders of shares in the company whose
addresses as shown in the register of members are places outside Australia
and the external Territories (in this sub-section referred to as "foreign
shareholders") if the company, in lieu of making offers to the foreign
shareholders in accordance with sub-section (2)-
(a) allots to a nominee approved-
(i) where the company is a stock exchange listed company-
by the stock exchange that is the home stock exchange in
relation to the company; or
(ii) where the company is not a stock exchange listed
company-by the Commission,
a number of shares equal to the number of shares in respect of which the
company would, but for this sub-section, be required to make offers to
foreign shareholders in accordance with sub-section (2);
(b) causes the shares so allotted to be offered for sale in such
manner, at such price and on such other terms and conditions
as are approved by that stock exchange or the Commission, as
the case may be; and
(c) pays to each of the foreign shareholders so much of the amount
(if any) remaining after deducting from the proceeds of sale-
(i) the expenses of the sale; and
(ii) the amounts (if any) payable to the company in respect of
the allotment of the shares,
as bears to that remaining amount the same proportion as the
number of shares in respect of which the company would, but for
this sub-section, be required to make an offer to the foreign
shareholder concerned in accordance with sub-section (2) bears to
the total number of shares allotted to the nominee in accordance
with paragraph (a) of this sub-section.
12. (ea) an acquisition of shares pursuant to a compromise or
arrangement approved by the Court under Part VIII of the
Companies (Victoria) Code;
(h) an acquisition of shares resulting from the exercise by a person
of a renounceable option or of an option or right granted or
conferred by a convertible note, where, if the person had
acquired the shares at the time when he acquired the
renounceable option or the convertible note, as the case may
be, the acquisition of the shares would not, by reason of sub-
section 13 (3), have contravened this Code;
(j) an acquisition of shares by a person as a result of the acceptance
by that person of a take-over offer, where the shares constituted,
or formed part of, the consideration for the take-over offer;
Takeovers Code . Schedule 3

a) made by acquiring shares in some other corporation that is a listed

corporation; or

) by the exercise of a power that a person whose ordinary business

includes the lending of money has in connection with a money-lending
transaction that is in the ordinary course of the person's ordinary
business but is not with an associate; or

k) of shares-

i) in a company that has less than 16 members, joint

members being counted as one; or

ii) in a proprietary company that has 16members or more,

joint members being counted as one, with the written
agreement of its members that this Code is not to apply
to the acquisition,

if the acquisition would not result in an acquisition of shares in

another corporation that is forbidden by this Code or a
corresponding law;* or

I) by an offeror in the ordinary course of trading on a stock market

(except an acquisition that is special within the meaning of the business
or listing rules of the stock exchange to which it is reported) within- .

i) 28 days after the Part A statement* concerning the

same class* of shares is served* on the company; or
ii) if offersare made within that time-before the end of
the offer period*; or

iii) the time from the making of the takeover

announcement* until the end of the offer period*,

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code

12. (k) an acquisition of shares in a company as a result of the

acquisition of shares in another corporation that are listed for
quotation on the stock market of a stock exchange;
( 1 ) an acquisition of shares by a person whose ordinary business
includes the lending of money where the acquisition results
from the exercise by that person of a power in relation to the
shares conferred on or vested in him pursuant to, by reason
of or in connection with a transaction in connection with the
lending of money entered into by him in the ordinary course
of that business, not being a transaction entered into with a
person associated with the first-mentioned person;

Acquisition of shares permitted in certain circumstances

13. ( 1 ) Section 1 1 does not-
(a) prohibit the acquisition of shares in a company that does not
have more than 15 members; or
(6) prohibit the acquisition of shares in a proprietary company
that has more than 15 members where the members of the
company have consented in writing to the provisions of this
Code not applying to or with respect to the acquisition,
if the acquisition would not result in
(c) a contravention of section 1 1 in relation to the acquisition of
shares in another company; or
(4 a contravention of a provision of a law in force in another State
or in a Territory that corresponds with section 1 1 in relation
to the acquisition of shares in a corporation in relation to
which that provision applies.
(2)For the purposes of sub-section ( I ) ,2 or more persons holding jointly
shares in a company shall be deemed to be one member of the company.
(3) Subject to sub-section (4),section 1 1 does not--
(a) prohibit the acquisition of shares in a company at an official
meeting of a stock exchange, in the ordinary course of trading
on the stock market of that stock exchange, during the period
commencing when a Part A statement relating to offers under
a relevant take-over scheme in respect of shares in that company
of the same class as the first-mentioned shares is served on the
company and ending at the expiration of 28 days after the day
on which the Part A statement is served or, if take-over offers
are dispatched pursuant to the Part A statement within those
28 days, at the expiration of the period during which those
take-over offers remain open, by the offeror under that take-
over scheme; or
Takeovers Cade Schedule 3

provided that the offeror proposes to acquire all shares of the

same class that the offeror does not already hold and the offer
is not subject to a defeating condition* except a condition that
a defined occurrence* in relation to the company does not
happen or that has the written approval of the omm mission;
or

m) at an auction of foifeited shares using a facility provided by a stock

exchange*; or

n) made as prescribed or in prescribed circumstances or with the written

approval of the Commission.

* See Schedule 2.
 Companies (Acquisition of Shares) (Victoria) Code-
-

13. (3) (6) prohibit the acquisition of shares in a company at an official

meeting of a stock exchange, in the ordinary course of trading
on the stock market of that stock exchange, during the period
commencing when a take-over announcement is made in
relation to shares in that company of the same class as the first-
mentioned shares and ending at the expiration of the period
in which offers constituted by that announcement remain open,
by the on-market offeror who caused the announcement to be
made.
(4) For the purposes of sub-section (3), a take-over scheme is a relevant
take-over scheme if, and only if-
(a) the offers under the take-over scheme are made in accordance
with sub-paragraph 16 (2) (a) (1); and
(6) no offer under the take-over scheme is subject to any prescribed
condition other than any one or more of the following
conditions:
(ii) a condition that a prescribed occurrence in relation to the
target company does not take place;
(iii) any other condition approved by the Commission.

12. ( m ) an acquisition of forfeited shares at an auction conducted at a

place at which, or by a facility by means of which, a stock
exchange maintains or provides a stock market;
(n) any other acquisition of shares made in a prescribed manner
or in prescribed circumstances; or
(0) any other acquisition of shares approved by the Commission
in writing.
13. ( 5 ) Where-
(a) a Part A statement relating to offers under a take-over scheme
is served on a company;
(6) after the Part A statement is served the offeror referred to in
the Part A statement acquires shares in the target company;
(c) the acquisition of those shares would, but for paragraph (3) (a),
have contravened section 11; and
(d) the offeror does not dispatch the offers to which the Part A
statement relates within the period of 28 days after the Pan A
statement is served on the target company,
the offeror is not entitled, without the consent of the Commission, to
exercise, or to authorize another person to exercise, any voting rights
attached to the shares 5eferred to in paragraph (6) of this sub-section.
 Takeovers Code Index

INDEX TO PLAIN ENGLISH VERSION

Section
Acquisition of shares
basic principles. ..................... ............................................................ 1
Commission's powers concerning, .................................................. ..69
compulsory, .........................................................................5 3 54, 55
disposal of, .................................................................................... 45, 46
gradual,................................................................................................. 2
not affected by basic principles, Schedule 3
notification of, ...................... .
. ............................................ 4 5 46
outside scheme, .......................... . ............................................. 30, 3 1
power to declare, unacceptable ,........................................................ -70
prohibited ............................ . ......................................................... 7 4
special. ............................................................................................... 48
Additional benefits to sellers of shares,...................................................... 4 4 8
Announcement (see Offers)
Approved manner of sending document. ....................................................... 77
Assets valuations. .............................................................................................. 3 2
Code
commencement,............. . .................................................................79
Commonwealth-State agreement and, ....................... . . ................. 80
exemption from operation of, ........................ . . ...............................69
persons to whom applicable,.................... . ........................................82
.
.
relation to other Acts................... ..................................................... 81
Commission
application to Court by. ........................... ....
.... 64. 65
approved manner of sending document. ....................... ... ............77
consent to offers under announcement by. ................... .
...
consent to withdrawal of offers. ............................................. 17, 42 (4)
......34 (2)
lodgement of offer to acquire with, ...............................................57 (7)
lodgement of notice that Part A statement
served with, ................................................................................. 7 (3)
lodgement of Part B statement with, .............................................10 (4)
lodgement of target company report with, ................................ 10 (3)
orders of .........................................................................................7 74
power concerning interests vested in it. ............................................. 76
power to declare acquisition unacceptable. .........................................70
power to declare conduct unacceptable,..............................................70
power to exempt from Code, ................................................................ 69
Takeovers Code Index
Section
power to intervene. ............................................................................... 73
powers where declaration in force,.......................................................72
registration of offers and Part A statement with ,....................................8
registration of variation by, ................................................................... 22
suspension of offers by, ......................................................................... 43
Compensation for loss resulting from misstatement,......................................... 61
Compulsory acquisition
circumstances of ,................................................................................... 53
completion of, ....................................................................................... 55
notice of, ................................................................................................54
Conditions (see Defeating Conditions)
Consideration
time limit for provision of ,.................................................................... 25
variation of, in offer,.............................................................................. 19
where shares acquired outside scheme,.............................................. 31
Convertible notes
definitions,.............................................................................. Schedule 2
false or misleading statement in, ................................... 60, item 5 and 6
notice by offeror to holders of, ..............................................................57
obligation of target company to supply information, ........................... 49
substituted lower price by offeror where issued, ..................................39
Court (see Power of Court)
Declarations
Commission by ,..................................................................................... 69
concerning offers and contracts,...........................................................27
power of Court concerning, .................................................................. 71
Defeating conditions
acceptance outside scheme where, .......................................................30
declarations concerning, ....................................................................... 27
in offers,........................................................................................... 23, 26
notices concerning, ............................................................................... 28
where offers not freed from, ................................................................. 29
Definitions, .......................................................................................... Schedule 2
Directors
record of names of ,................................................................................ 58
right to refund of expenses, ..................................................................50
Directors, obligations of,
false or misleading statements, .............................................................60
Pan A statement,........................................................................... 7 (2)
Part B statement,.............................................................................10 (2)
Part C statement,...................................................................................36
Part D statement, .................................................................................. 41
to arrange vote,............................................................................3 2 (2)
Dissenting shareholders
how shares acquired, ............................................................................. 53
rights, where shares acquired, ..............................................................54
Expert report
in relation to acquisition of non-voting shares, ..............................57 (2)
Part D statement and, ...........................................................................41
where offeror connected with target company, ....................................12
False or misleading statements, .......................................................................... 60
Forecast of profits
prohibition on, ...................................................................................... 51
 Takeovers Code Index
Section
Gradual acquisition
basic principle of. .................................................................................... 2
formula relating to, ................................................................................. 2
Misstatements
compensation for loss resulting from, ..................................................61
presumption concerning person's knowledge, .....................................62
proposed offers and, .............................................................................. 59
Multipliers
prevented,..............................................................................................16
contrary to Code,.................................................................................. 63,
powers of Court and, ............................................................................66
relating to misstatements, ............................................... 9 , 60, 61, 62
Offeree
holding shares for someone else. .......................................................... 14
prohibition of additional benefits to. ....................................................48
Offerors
acquisition of non-voting shares. options and
notice by. ............................................................................................... 57
compulsory acquisition by, ........................................................ 3 , 56
right to dispose of shares, ...................................................................... 44
Offers (see Takeover schemes)
acceptance of, ............................................................................ 14, 15, 23
alternative
. . . terms in, where compulsory
acqulsltion notice sent,.............................................................. 54 (2), (3)
consideration, time for, ......................................................................... 25
contents of, ..................................................................................... 5 35
defeating conditions in,...........................................23, 26, 27, 28, 29, 30
effect of acceptances outside scheme on,.............................................. 30
effect of acceptance of proportional offer, ........................................15
effect of higher price, ............................................................................ 38
extension of period,......................................................................... 37, 43
how made, ...............................................................................................3
misstatements and................................................................................. 60
misstatements and proposals for. .......................................................... 59
niultipliers prevented. ........................................................................... 16
necessary elements of, ............................................................................. 5
notice of variation of, .......................................................................... 21
offeree holds shares for someone else, .................................................. 14
procedures for sending,....................................................................7, 77
prohibited conditions in,......................................................................... 6
proportional ,.......................................................................................... 15
registration of, with Commission, .......................................................... 8
special circumstances in ,....................................................................... 13
types of. ...................................................................................................4
unconditional ........................................................................................ 26
variation of, .........................................................................18, 19, 20, 21
withdrawal of ................................................................................... 1 42
Options and notes
applications to Court by holders of,......................................................65
holder's rights,....................................................................................... 57
Part A statement
contents of. .............................................................................................5
Court powers if not sent,....................................................................... 64
Takeovers Code Index
Section
lodgement with Commission ......................................................... 7 (3)
registration of. with Commission. ........................................................ 8
service of .........................................................................................7 (2)
Part B statement
contents of. .............................................................................................. 5
obligation of target company to provide ...............................................
10
signing of. ........................................................................................ 10 (2)
Part C statement
takeover announcements and. .............................................................36
Part D statement .............................................................................................. 41
Power of Court
concerning Commission's declaration,.................................................71
concerning Commission's orders..........................................................72
concerning prohibited acquisition of shares.........................................74
inadvertent breach of Code where ........................................................
66
miscellaneous, .......................................................................................75
to declare unfair and unconscionable. ..................................................67
to make declarations. ............................................................................
68
to protect interests, ................................................................................ 65
types of orders, ...................................................................................... 75
where part A statement not sent, ..........................................................64
Profit forecasts.....................................................................................................51
Scheme (see Takeovers schemes)
Shares (see Acquisition of Shares)
Takeovers
basic principles of........................;........................................................... 1
circumstances of ,...................................................................................34
contents of, ............................................................................................35
effect of action by target company that
affects the value of shares,.....................................................................39
effect of paying a higher price than offered, ........................................
38
extension of period of, .......................................................................... 37
liability of members of stock exchange,................................................40
Part C statement and....................................................................... 36 (2)
procedures for, ..................................................................................... 36
service of Part D statement after. .......................................................
41
suspension of acceptance of offers, .......................................................
43
the value of shares................................................................................. 39
withdrawal of offers after, ..................................................................... 42
Takeover approval provisions
adoption of provisions, .......................................................................... 33
insertion or renewal of provisions,..................................................33 (3)
voting requirements, ............................................................................. 32
Takeovers schemes (see Offers)
acceptance outside. ............................................................................... 30
basic principles of,.... 1
offers and Pan A statement under, ......................................................... 3
Unacceptable acquisition. ................................................................................... 70
Unacceptable conduct, .................................................................................... 70
Withdrawal of offers......................................................................................17. 42

F D Atkinaon Government hinter Melbourne

 I asked him to come to meet me tomorrow and,
mean while, would he note down on paper his precise
thoughts as to whether or not Humphrey h overstretched
and send them over to me.
An hour later his thoughts amved, duly noted These
are they:

H M Treasury
Permanent Secretary
March 2

Dear Prime Minister,

When I said that HA was not overstretched, I was of

course talking in the sense of total cumulative loading
taken globally rather than in respect of certain individual
and essentially anomalous responsibilities which are not,
logically speaking, consonant or harmonious with the broad
spectrum of intermeshing and inseparable functions and could
indeed be said to place an excessive and supererogatory
burden on the office when considered in relation to the
comparatively exiguous advantages of their overall
consideration.

Yours ever,

I read it cargulk several times. My conclusion: he

could do part ofNumphreS/sjob.
LAW R E F O R M C O M M I S S I O N O F V I C T O R I A

PLAIN ENGLISH
AND THE LAW

MMjlYTRATES' COURTS RU1.PC IYW)

~tcoui.c-~crntrnMd

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Mugrnr.rrr' Chwnx Ruks IUR03gn, I
UENERAL FORM OF t4BADlNG OF WUMF.Xf%
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ACKNOWLEDGEMENT
Back cover reproduced from Yes Prime Minister,Volume 1, by Jonathan Lynn
and Antony Jay, with the permission of BBC Enterprises Ltd.
Law Reform Commission of Victoria

Appendixes 3,4, 5, 6, 7 and 8

PLAIN ENGLISH
AND THE LAW
 TABLE OF CONTENTS

Page

Appendix 3 Summons and Information 1

Magistrates (Summary Proceedings) Act 1975 (Vic)

Appendix 4 Agreement and Covenant under sections 47 and 41

of the Historic Buildings Act 1981 (Vic)

Appendix 5 Law Institute's Mortgage Over Business

Appendix 6 Format of Legislation

Appendix 7 Legislation Rewriting Program

Appendix 8 Plain English Unit

 Summons Form

APPENDIX 3

SUMMONS AND INFORMATION

MAGISTRATES (SUMMARY PROCEEDINGS) ACT 1975 (Vic)

There are two main differences between the original and plain English
versions of this form. First, the plain English version is in a modern
format. The material has been arranged in three logical blocks. The
design highlights this organisation by presenting each block of
information in its own box, and through well-marked headings. The
design contributes to the message, making it easy for readers both to
absorb the material and to find any particular part quickly. Again the
defendant's name has been moved to the top position so that persons
who receive a summons can see at once whether it is for them. Secondly,
the space saved by the new approach and design has been used to
provide a vast amount of helpful ancillary information to explain the
nature of the document, court arrangements, and the availability of
assistance. A brief version of this information in a number of ethnic
languages will also be attached to the form. It is not reproduced here.
 Plain English Summons Form

t A d p m to CaKt Ref. Dady No.

Summons with Information

I I I I
.........................................................................

..........................................................................
Original for Court Register
I I I I
To the
defendant I"I'
II"I1 "Of"

1 Realstrat~onNO. I State I
I Postcode 1 I
You hav'e been charged with breaking the law.
Read both pages to see what you must do.
L~cenceNO 1 state

(Inlormatlon)

Under what law?

- -
I Act or Regulation No. 1 Sectimn or Clause (Full Ref)
I
UC'wealth UReg.
Type of offence

Are there more charges?

Summary offence
(You ahwld go to Cwrt)

No Yes-see 'Continuation of Charges' attached

Indictable offence
(Youmum go to Court)
I
Who made the charge?
(Infwmant)

Agency and Address

Phone No.

Agency Ref.

Where to go Magistrates' Court

Address
I I
T~me I
I PhoneNo.
Month Year I
Sworn and Issued at Date

Sworn before (S~gnature)

3Clerk of Magistrates' Court
Issued by (S~gnature) Justice of the Peace
 Summons Form Original

Magistrates (Summary Proceedings) Acr I975 F. 381

Magistrates' Courts Rules 1976-First Schedule-Form 2

INFORMATION FOR AN *INDImABLE OFFENCE/OFFENCE PUNISHABLE

SUMMARILY AND SUMMONS THEREON

' (')In the Magistrates' Court

offences
at

Informant

Defendant

of

The information of

in the State of Victoria

(2) Stare
offencels, who says that

Informant

To the abovenamed defendant

,.
(3) If sworn

s w r n ':
WHEREAS the above information has this day been
*Clerk of a Magistrates' Court.
by the abovenamed informant before me the undersigned of the Peace for Victoria,

YOU ARE SUMMONED to appear on the day of

(4)$/fG$ before * (4) such Justice or Justices as are then present

punishable
summarily.
*(I) the abovenamed Magistrates' Court

to answer to the information and be further dealt with according to law.

Dated at the day of

*Justice of the Peace

*Clerk of the Magistrates' Court

(4) IF YOU DO NOT APPEAR TO ANSWER TO THE INFORMATION, A WARRANT

OF APPREHENSION MAY BE ISSUED.

'Delete whichever is fnappllcable.

 Plain Enalish Summons Form
WHAT TO DO WHEN YOU GET A SUMMONS
Before your case is heard, you have to decide whether you
will plead not guUty or guilty. You can get advice from:
A lawyer-look under solicitors in the Yellow Pages
Law Institute-le al advice and referral service
(Phone: (03) 602 ~ O O O )
iegal id om mission-
Dandenong (03) 791 5522 Melbourne (03) 607 0234
Frankston 1031783 6855 Morwell
. . 1051134 8055
Geelong (052) 9 2211 - Preston (03)478 8844
Glenroy (03) 306 0122 Sunshine (03)
. . 31 1 861 1
Your -local ~ o r n m u n i tLegal
~ Centre-look under local
Government in the whlte pages
Aboriginal Le al Service Co-op ((03) 419 3888)
o The Clerk of Zourts named in your summons
l h f f k Charges-The Legal Aid Commission conducts
workshops to help people who want to plead guilty to traffic
charges and to help thenl handle their own cases in Court.
Contact the nearest office of the Legal Aid Commission.
WHAT IS A SUMMARY OR AN INDICTABLE OFFENCE?
This summons will tell you whether you have been charged
with a 'summaryoffence' an 'indictableoffence' or, a mixture
of these offences.
Summary Ottences.
Theseoffences are only heard in the Magistrates' Court. It is
important for you to come to Court so that the Magistrate
can hear what you have to say.
Indictable Ottences.
These offences are more serious than summary offences.
You must go to Court on the day of your Court case. If you
cannot go to Court on the day written in your summons you
must contact the Court Co-ordinator to see what you must
do.
Many indictableoffences can be heard by a Magistrateor a
Judge and Jury. You may have to decide whether you want
your case heard by a Magistratein the Magistrates' Cwrt or
by a Judge and Jury in the County Couh Talk to your lawyer
to see if you haveto makethis decision. H you decide to have
your case heard in the County Court you will be given a new
date for your Court hearing.
GOING TO COURT
Contact the Co-ordinator at the Court named in your
Summons if you have any. questions
. about where you have
to go.
You should be at the Court at least half an hour before the
time written on your Summons. Go to the counter and let
Court Clerk know that you have arrived.
NOTE:
Each Magistrates' Court has a Court Co-ordinator who
organises the time and date for cases to be heard. If you
have any problems it is important for you to contact this
nersan
8--
If you are bringing character witnesses, pleasecontact the
Court Co-ordinator three davs beforethe dav
case.
-of vwr
. Court
If you cannot come to Court because you have a good
reason or because ou cannot get transport, contact the
Court CO-ordinatorL o r e the day of your Court case.You
ma be able to have your case moved to a different date
andlpossibly to another Court.
You have two choices when you go to Court:
1. You can plead not guilty
2. You can plead guilty
Remember. you do not have to plead guilty, the choice is
yours.
IF YOU WANT TO PLEAD NOT GUILTY
You muat let the Court Co-ordinator know that you will be
p!eading not guilty and how man witnesses you will be
bringing. You should either telepKone or see the Court
Co-ord~natorin person at least three days before the day of
your Court case.
Your case will not be heard on the day written in your
summons. You will be told of a new date and at what Court
your case will be heard.
You should talk to a lawyer if ou want to plead not guilty.
You will not be d i ~ a d v a n t a ~ dyou
i f plead not guilty.
Contact the Court Co-ord~natorimmediately if you decide
to change your plea to guilty.
IF YOU WANT TO PLEAD GUILTY
If you go to Court on the day written in your summons your
case will be heard on that day.
The Magistratemay find that you were uilty and order that a
conviction be recorded against you. $his may become a
permanent record. You might find it difficult to get a job or go
overseas if you have a conviction.
WHAT HAPPENS IN THE COURTROOM?
When your name is called go into the courtroom.
You will be told where to stand. The eople already in the
courtroom are the Magistrate, a J e r k of Courts, the
Prosecutor and members of the public. The person who
brought thischar eagainst you (the Informant)may not be in
the courtroom. ~ a Prosecutor
e will take his or her place.
The charge will be read out by the Clerk. If you don't
understand a charge you should ask the Magistrate to
explain it to you. You should call the Magistrate elther 'Your
Worship" or "Sir" or "Madam". If you have been charged with
an indictable offence the Magistrate will ask if you want your
case heard in the Magistrates' Court.
The Magistrate will ask if you plead not guilt or guilty.
If you say you are guilty the Prosecutor or t i e person who
charged you, will give the Magistrate a summary or the
evidence against you (the Defendant). If you agree with the
summary the Magistrate will then listen to what you or your
lawyer has to say on your behalf. The Magistrate will then
decide how to deal with you.
If you say you are not ullty to any of the charges, your case
w~llbe put off to anotler date and possibly another Court.
You will be told of the new date and place for your case.
IF YOU WANT TO APPEAL AGAINST THE MAGISTRATES'
DECISION
--- - -
An appeal can be made at theend of your Court caseor up to
30 davs from the date of vour hearing. The a ~ ~ ewill a l be
a
heardjn the County Court by a Judge a later date. You will
be told of this date.
IF YOU DO NOT GO TO COURT
If you have been charged with an indictable offence
You must go toCourt on the day of your case. If you are not at
Court. or vou have not contacted the Court Co-ordinator you
may be airested.
If you have been charged with a summary offence
It is importantfor you to be at Court when your case is heard.
If you are not at Court, or have not contacted the Court
Co-ordinator, your case may be put off to another date and
place. You mi h t not be told.this date and place, unless you
ask the~ourtso-ordinatororthe oerson whocharaedvou. If
you do not go to Court when'your case is tibad, the
Magisbate will hear the evidence of the person who made
the charge against you, and perhaps other witnesses, and
decide what to do. If you are found gullty of any charge made
against you, the Court Co-ordinator will send you a notice in
the mail telling you the result.
HOW TO GET TO COURT
If you need to come to Court by public transport, ring the
Transport Information Centre on:
For the Metropolitan area-(03) 617 0900
Mon-Sat 7.30 am to 8.30 pm
Sunday 9.15 am to 8.30 pm
For Country areas- 03) 62 3115
on-sat 8.00 am to Q.OO pm
Sunday 10.00 am to 6.00 pm
They can tell you what to do and where to catch a train, tram
or bus in the metropolitan or country areas.
IN THE MAGISTRATES COURT

in the State of Victoria,

I, of
*by delivering a true copy
make oath and say that I sewed a true copy of the within summons on the within-named
to * h i d h e r persqnally at /by leaving a true copy for *him/her at *his/her last or most usual place
of *abode/business with a person apparently *an inmate thereoflemployed thereat and apparently not less than 16 years
of age at /by posting such true copy by pre-paid registered post at
addressed to *him/her at *his/her last known place of *residence/business at
which address I ascertained from , on the day of 19
at *a.m./p.m.

Sworn at
In the State of Victoria
the day of
before me

*Justice of the Peace

*Clerk of the Magisrmtes' Cowl
*Delere whichever i s inapplicable
 Historic Buildings Forms

APPENDIX 4

AGREEMENT AND COVENANT UNDER SECTIONS 47 AND 41 OF

THE HISTORIC BUILDINGS ACT 1981 (Vic)

The Commission's work on these documents was done at the request of

the Minister for Planning and Environment, the Hon. J H Kennan,
MLC. The documents suffered from many of the defects revealed in
the Report and the Drafting Manual (Appendix 1). The original and
plain English versions are set out below. They are followed by an
analysis of the defects in the original documents.

Relationship between the two documents

There are two forms of agreement under the Historic Buildings Act
1981. The first is an agreement between the Historic Buildings Council
and the owner of an historic building. T h e second is a covenant between
the latter and the Minister for Planning and Environment. The first
document arises from the power of the Council, with the consent of the
Minister, to make a grant or loan to assist the preservation or restoration
of an historic building.' T h e agreement between the Council and the
owner provides for the grant or loan and contains the conditions which
are applicable to it under sub-section 47 (2) of the Act. The second
document arises from the power of the Minister to enter into a covenant
with the owner of an historic building binding the owner in relation to
its use or pre~ervation.~ The owner of the building may then have the
covenant noted on the title of the land (in the case of Torrens title land)
or registered under the Property Law Act 1958 (Vic) (in the case of old
law land). The covenant then binds not only the owner but also anyone
who derives title from him or her.3
Ori~inal Historic Buildings F m s

ORIGINAL VERSION

AGREEMENT

THIS AGREEMENT is made the day of

1984

BETWEEN: T H E HISTORIC BUILDINGS COUNCIL, C/- T H E

MINISTRY FOR PLANNING AND ENVIRONMENT,
500 Collins Street Melbourne ("the Council") of the one part

AND

("the Owner") of the other pan.

WHEREAS

A. The owner is registered or entitled to be registered as the proprietor of the

land described in Certificate of Title Volume Folio (hereinafter called
"the land").

B. There is situated on the land a registered building within the meaning of the
Historic Buildings Act 1981 known as
being No. on the Register of Historic Buildings established pursuant to
Section 14 of the said Act. (hereinafter called "the said building")

C. Pursuant to Section 47 of the said Act the Council with the consent of the
Minister has resolved to make a loan for the purposes of assisting the
preservation or restoration of the said building.

D. Accordingly it is agreed that the owner be lent the sum of $ upon such
terms and conditions as are hereinafter stated.
 Historic Buildings Forms Original

THE PARTIES AGREE AS FOLLOWS:

1. The Council hereby agrees to lend the owner the sum of $ ("the loan
money") and the Owner agrees to repay the loan money together with interest
thereon at the rate of per centum per annum with quarterly rests calculated
from the date of advance of the loan money ("the date of advance");
(a) by successive quarterly instalments of $ the first of which
instalments is to be paid at the expiration of one quarter from the date
of advance; and
(b) by one payment of the balance of the loan money and interest then
outstanding at the expiration of years from the date of advance.
2. The Owner shall have the right at any time to pay the sum of $50.00 or any
multiple thereof (in addition to the payments referred to in Clause 1) in reduction
of the loan money and interest on any amount so paid shall abate from the next
quarterly day for the calculation of interest.
3. Notwithstanding Clause 1, upon sale by the Owner of the land or any part
thereof the whole of the balance of the loan money then owning plus interest
shall immediately become due and payable to the Council
4. The owner shall insure and so long as any money remains outstanding
pursuant to this agreement keep the registered building insured against loss or
damage by fire and such other risks as the Council may from time to time
require to the full value thereof with an insurer for the time being authorised by
the Australian Insurance Commissioner.
5. The Owner shall deposit a copy of the policy of insurance relating to the said
improvements with the Council and shall produce evidence of the payment of
each premium on request by the Council.
6 . Any money received by way of such insurance shall at the discretion of the
Council be applied in or towards the payment of any money then remaining
outstanding pursuant to this agreement or in the rebuilding of the registered
building.
7. The statement in the Council's records of the amount of money owing by
the Owner at any given time shall be prima facie evidence of the amount then
outstanding.
8. The Owner agrees that the loan money shall be applied only towards the
works set out in the said schedule 1. ("the works")
9. The Owner agrees that specified works shall commence by and
be substantially completed. by or notwithstanding Clause 1 the
loan money together with interest accrued thereon shall be repaid on demand
unless the Director of the Council otherwise provides in writing.
10. The Owner agrees to enter into a covenant with the Minister for Planning
and Environment as set out in Schedule 2 and to use his best endeavours to have
a memorandum of the covenant noted upon the Certificate of Title to the land.
11. The Owner charges the land with repayment to the Council of all amounts
owing by the Owner to the Council under the terms of this Agreement and
acknowledges that the Council may lodge in the Office of Titles c caveat against
the land in respect of such charge.
Orkina1 Historic Buildings F m s

1
SIGNED SEALED AND DELIVERED
by the said Covenantors .........................

in the presence of:- .........................(WITNESS)

..........................WITNESS)
SIGNED SEALED AND DELIVERED
By the said
Minister for Planning
and Environment
in the presence of:- I ..........................MINISTER)
.........................(WITNESS)
 Historic Buildings Forms Original

ORIGINAL VERSION

COVENANT

THIS DEED OF COVENANT made the day

of 1984

BETWEEN:

(hereinafter called "The Covenantor") of the one part

the Minister for Planning and Environment

(hereinafter called "The Minister") of the other part.

WHEREAS:
(a) The Covenantor is registered or entitled to be registered as the
proprietor of the land situated as and known as
being the land more particularly described in Certificate
of Title Volume Folio . (hereinafter called "The said land").
(6) There is situated on the said land a designated building being numbered
on the Register of Historic Buildings kept pursuant to section 14 of the
Historic Buildings Act 1981 (hereinafter called "the said building")
(c) Pursuant to Section 47 of the said Act the Council with the consent of
the Minister has resolved to make a loan for the purposes of assisting
the preservation or restoration of the said building.
(d) Accordingly it is agreed that the owner be lent the sum of $
(e) By Section 41 of the Historic Buildings Act the owner of land upon
which there is a designated building may enter into a covenant with
The Minister which binds the owner as to the development or use of
the land or any part thereof or the preservation maintenance or care
of any buildings thereon.
( f ) The Covenantor has agreed with T h e Minister that he will not apply
nor support any application for the removal of the said designated
building from the said register.
Original Historic Buildings Forms

NOW THIS DEED WITNESSETH As follows:-

1. In pursuance of the said agreement and by virtue of Section 41 (1) of the

Historic Buildings Act 1981 the Covenantor hereby covenants with The Minister
in respect of the said land and each and every part of such land with the iiltent
that the benefit of this covenant shall be for The Minister
and his successors and that the burden of this covenant shall be attached to and
run at law and in equity with the said land and each and every part of the said
land and that the said Covenant and his executors administrators successors and
transferees the registered proprietor or proprietors for the time being of the said
land and each and every part thereof will not remove
or demolish the building on the said land for a period of at least ( ) years
from the adate hereof and without first repaying any monies granted by The
Minister and will preserve maintain and care for the said building insofar as it is
practicable and further will not make application to the said Council:
(a) pursuant to Section 18 (1) (c) of the said Act for a recommendation that
the said building be removed from the register; or
(b) pursuant to Section 26 (3) to remove or demolish the said building;
for a period of ( ) years from the date hereof and this covenant shall cease
to operate or to be of any effect at the expiration of the period of ( ) years
from the date hereof.
2. The Covenantor agrees and acknowledges that it is intended that the above
covenant shall be set out as an encumbrance at the foot of the Certificates of
Title to issue in respect of the said land and shall run with such land and each
and every part of it.
3. The Covenantor agrees and acknowledges that the property shall be opened
to the public on at least ( ) days per annum and that the Director of the
Historic Buildings Council be notified of the date of such opening at the
commencement of each calendar year.

SIGNED SEALED AND DELIVERED

by the said Covenantors

in the presence of:-

I .........................

.........................(WITNESS)
.........................(WITNESS)
SIGNED SEALED AND DELIVERED
By the said
Minister for Planning
and Environment
in the presence of:- I .........................(MINISTER)
.........................(WITNESS)
 - -
Historic Buildings Forms Plain English

PLAIN ENGLISH VERSION [Reduced size]

8 *
Agreement for a loan or a grant
Under Sectlons 41 and47 of the H~stor~c

Through th~sagreement the V~ctor~an

Bulldlngs Act 1981

Government makes f u n d s ava~labli

to the owner to help preserve or restore a h~storlcbulldlng.

D . # @ # a .

Name 01the owner

Postaladdress
'70stcodc

Address 01land I

Tltle details Vd Foho

Detaals of butld~ng k. on the Regutef dH i e Butldtngs

Amount 01 grant $

Perlod 01Agreement

Amount of loan Tam. b htuesl %

Amount 01 ~nstalrnents $ Rmt irntalmmtdue on.

9 3 -

Works to be carrued out

Pernodlor carrylng
outthe works 1 Fm

t
 Plain English Historic Buildings Forms

Conditions for Both Loans and Grants

The owner agrees for the tern ofthe gmnt or loan
I. to preselw and care for the building
2. not to remove or demolish the building
3. not to seek to have the building removed from the
register
4. to use the grant or loan only to carry out the works
which are listed in this agreement
5. to employ appropriate contractors to carry out the
works to the satisfaction of the Directoror his or
her nominee
6. to get all necessary planning or building permits to
carry out the work
7. to repay the grant or loan when the Council asks,
if the works are not completed in accordance with
this agreement
8. to insure the building for the d u e and twm of the
gmnt or the loan
9, to ive the Council a copy ofthe insurance @icy
an! of the papent of each premium
10. to allow the Council to use any mmey which is
received from i n s u m either to the grant
ortheloanortorepairthedaaasthe
Council directs
12 t o p n u p t h e l a n d a s s e c u ~ f ~ ~ t h e ~ d
amounts owing to the Council

Extra Conditions for Grants

The owner agrees
13. to repay the rant in full immediatelyif the owner sells 14. to repay half of the ra.nt jmmediately if the owner AIs
or transfers #e land within six months of the grant or transfers the l a n $ l h ~two
n years

Extra Conditions for Loans

The owner agrees The Council agrees
15. to repayth; loan to the Council immediatelyif the 17. t o s l l o w t h e ~ t o r e d u c e t h e l o a n b y p a ~ i ~ ~
owner sells or transfers the land or any part of it or multiples of $50when a regular 'Malment is dve
16. to pay interest on the loan at the current Government
long term loan rate if the owner does not pay an
instalment on time

Acceptance by the Owner

I agree to accept the grant loan,and to obserw all the Conditions of this agreement
Signed and Delhered by the O m Sign- &Witness

Date - -

Approval by the Historic Buildings Council

The Council approves the grant CI loan on the condiins in this agreement
Seal of the Ctuncil Signatun d Witness

Date

Consent and agreement of the Minister

Iagree with the conditions of the agreementand consent to the grant O loan, and to the seal oftheCouncil king affked.
Signedand Delivered by the Minister Signaturrof Witness

Date
 Historic Buildinps Forms

Analysis of Defects in Original Documents

Original version
Language

Clause 1 of the covenant contsios a single sentence which exceeds 240

words. It deals with five distinct matters:
the conferring of the benefit of the covenant on the Minister and his
successors and the burden of the covenant on the owner and his
successors
the promise by the owner not to demolish the building for a certain
period
the promise by the owner to maintain the building
the pro'mise by the owner not to apply to the Council for removal of
the building from the register or to be allowed to demolish the
building under the Historic Buildings Act
the provision that the agreement is to expire after 10 years.
The remaining provisions of each document are kept within reasonable
limits as to both length and subject matter. Archaic words are rare, apart
from 'witnesseth' and 'covenant' itself. In the plain English version,
'Signed and Delivered' had to be retained to ensure the effect of the
document as a deed. The law should be updated to remove the need for
this archaic form.4 Unnecessary cross-referencing by the use of 'said',
'aforesaid', 'hereby', 'hereinafter', 'aforementioned', and 'pursuant to',
are scattered throughout each document. Tautologies include
'preservation, maintenance or care' in the preamble to clause 1, 'remove
or demolish' and 'attached to and ...' in clause 1 of the covenant and
'agrees and acknowledges' in clauses 2 and 3.

Structure

The fact that there is no need for two separate documents is suggested
by the overlap in the preamble to the covenant and agreement. The
subject matter of clauses a-d in the preamble to the covenant is identical
with that of clauses (A)-(D) in the preamble to the agreement. The
preambles to both documents are unnecessary in any event. All the
material in them is repeated in the agreement and the covenant. The
separation of the two documents appears to have been based on two
considerations. First, a 'covenant' is different from an 'agreement'.
Secondly, there are different parties to the two arrangements. Both
statements are correct but irrelevant. A covenant is simply an agreement
under seal. Consequently, a combined document which complied with
the requirements concerning seals would suffice for the purposes of the

4. Originally, it was signed, sealed and delivered. See s 7 3 Property

~ Law Act 1958 (Vic).
 Historic Buildings Forms

Act. The fact that the existing covenant and agreement are not between
identical parties is no bar to a combined document. The owner of the
historic building is a party to each. As far as the owner is concerned,
there need be only one transaction. The distinction between Minister
and Council is irrelevant as far as he is concerned. The two documents
can therefore readily be combined, even though the promises of the
owner are sometimes directed to the Minister, sometimes to the Council.
Combining the documents in the plain English version is valuable not
only in removing overlaps between the two, but also in recognising the
fact that the two agreements are inseparable pans of a single
transaction.This is because the covenant is ancillary to the agreement
to. make money available for the restoration or preservation of the
relevant building.

Design

The original documents were in the traditional legal form. They were
unattractive to readers and failed to highlight the relevant information.
The plain English version reduces markedly the total amount of material
and presents it attractively. It helps both readers and administrators.
 Mortgage Form

APPENDIX 5

LAW INSTITUTE'S MORTGAGE OVER BUSINESS

The Commission's work on this document was done at the request of
the Law Institute. The document suffers from many of the defects
revealed in Chapter 2 of the Report and in Appendix 1. The original
and plain English versions of the document are set out below. They are
followed by an analysis of the defects in the original document.
 Mortgage Form

Law Institute
of Victoria
Mortgage over Business
Plain English Mortgage F m

PLAIN ENGLISH VERSION

Dated 19

(Mortgagor)

TO

(Mortgagee)

MORTGAGE

OVER

BUSINESS
 Mortgage Form Original

ORIGINAL VERSION

LAW INSTITUTE
MORTAGE OVER BUSINESS
Plain English Mortgage Form

CONTENTS Page

A. DETAILS OF MORTGAGE 26

B. THE BASIS ON WHICH THE MORTGAGE IS MADE 30

C. THE MORTGAGE

What the mortgagor conveys to the mortgagee

D. CONDITIONS THE MORTGAGOR MUST COMPLY WITH 36

Payment

T o pay principal and interest 36

Goods

T o take care of the goods

T o obtain the mortgagee's consent before

parting with goods or goodwill

Not to conceal goods or attach them as fixtures

Insurance

T o insure the goods, pay premiums,

do nothing to affect a claim etc

Premises

T o obtain consent of others to mortgage

T o observe conditions of lease of premises

Not to part with possession of lease

Not to prejudice mortgagor's right to

occupy premises

T o conduct business carefully and efficiently

 Mortgage Form Plain English

Page

Miscellaneous

T o preserve goodwill

T o pay rent taxes etc

T o comply with the law

Not to cancel powers of the mortgagee

T o pay fees, duties, costs and expenses

T o allow mortgagee to enter premises

E. ENFORCEMENT

Circumstances when mortgagee may enforce

the mortgage

Receiver

Power of Attorney

General powers of mortgagee on enforcement

Indemnity

F. GENERAL

Time to perform obligations

Service of notices by mortgagee

Acceptance of bill of exchange or promissory

note does not affect mortgage

Receipt when principal and interest repaid

Nominee may exercise mortgagee's rights

Joint and individual liability

SCHEDULE

Meaning of words
Plain Ennlish Mortgage Form

COMPARATIVE TABLE

Plain English Original

1 1,2,5
2 3(a)(c)
3 6(a)(e)(tl(m)
4 6(b)(c)
5 6(n)(o)
6 6rn(g)W-(I)
7 6(t)
8 6(u)(i)(ii)(v)
9 6(u)(iii)(iv)(q)
10 6(5)
11 6(h)
12 4
13 6(d)
14 6(r)
15 60)
16 6(z)(w)
17 6(4
18 7(a)
19 7(b)(iv)(v)
20 8
21 3(b),7(b)(i)(ii)(iii)(vi)
22 6(v),7(b)(iii)
23 6(x),7(c)
24 6(Y)
25 7(d)
26 9
27 1O(b)
28 1O(c)
Schedule lO(a)(c)(d)
Plain English Mortgage Form

A. DETAILS OF MORTGAGE
1. DETAILS OF MORTGAGOR*
a) Name: ..............................................................................
(In full) ..............................................................................
..............................................................................
b) Address:
;I Home ..............................................................................
..............................................................................
ii) Business (Set out "the premises")

a) Name:
(In full)
..............................................................................
b) Address:
Home ..............................................................................

c)Occupation: ..............................................................................
d) Business Name: ..............................................................................
2 . DETAILS OF
MORTGAGEE*
a) Name: ..............................................................................
..............................................................................
b) Address: ..............................................................................
..............................................................................
3. DETAILS OF GOODS*

* See Schedule
 Mortgage Form Original

THE SCHEDULE HEREINBEFORE REFERRED T O

FULL NAME OF MORTGAGOR: ..............................................................

RESIDENTIAL ADDRESS OF MORTGAGOR:

..............................................................
OCCUPATION OF MORTGAGOR: ..............................................................
BUSINESS ADDRESS OF .....................................the premises")
MORTGAGOR:

ANY NAME OR STYLE THE MORTGAGOR

TRADES UNDER: ..............................................................
NAME OF MORTGAGEE: ..............................................................
ADDRESS OF MORTGAGEE: ..............................................................
DESCRIPTION OF CHATTELS: ..............................................................
Plain English Mortgage Form

4 . DETAILS OF PAYMENTS
a) Amount of principal $ ....................
6 ) Interest: $ ....................% (simple) $
c) Amounts payable:
No. of instalments: ............................. . ........ each month
Instalments due: ...............................................................
First instalment due: ...............................................................
Amount of ...............................................................
instalment:
5 . DATE OF MORTGAGE
The date of this mortgage is .................day of .................19
6 . MORTGAGOR 'S SIGNA TURE
Signed and delivered
by the mortgagor

Witness (Signature)
(Name in Full)

Signed and delivered

by the mortgagor*

Witness (Signature)
(Name in Full)

* See Schedule
 Mortgage Form Original

PRINCIPAL SUM:

RATE OF INTEREST: ..........p er centum per annum (simple)

$..........
TERMS OF REPAYMENT: By ..........consecutive monthly
payments of $ ..........
each the first to be paid one month
from the date of the loan of the
principal sum and the subsequent ones
monthly thereafter.

IN WITNESS WHEREOF the Mortgagor has hereunto set his

hand and
seal
the day of 19

SIGNED SEALED AND

DELIVERED
by the said

in the presence of:

Witness: ....................... .
...............

SIGNED SEALED AND

DELIVERED
by the said

in the presence of:

Witness: ......................... .
..................
Plain English Mortgage Form

B. THE BASIS ON WHICH THE MORTGAGE IS MADE

This mortgage is made on the basis that the mortgagor* is the beneficial
owner and is in possession of the goods* set out in the DETAILS OF
MORTGAGE.The mortgage is made to secure the repayment of an amount
set out in clause 4 of the DETAILS OF MORTGAGE which the mortgagee*
will advance to the mortgagor when this document is signed.

* See Schedule
 Mortgage Form Original

MORTGAGE OVER BUSINESS

THIS INDENTURE is made between the Mortgagor described in the Schedule
hereto (hereinafter called "the Mortgagor") of the one part and the Mortgagee
described in the Schedule hereto (hereinafter called "the Mortgagee") of the
other part WHEREAS the Mortgagor is the beneficial owner in possession free
from all encumbrances of the Chattels described in the Schedule hereto
(hereinafter called "the Chattels" which expression shall include all accretions
to the Chattels) which are now situate in or upon the premises described in the
Schedule hereto (hereinafter called "the premises") AND WHEREAS the
Mortgagee has agreed to lend to the Mortgagor the principal sum stated in the
Schedule hereto (hereinafter called "the principal sum") by way of a present
advance to be made on the execution of this instrument AND WHEREAS it is
the intention of the parties that upon execution of these presents the legal title
to the Chattels and the goodwill of each business carried on by the Mortgagor
shall vest in the Mortgagee NOW FOR THE CONSIDERATION AFORESAID
THIS INDENTURE WITNESSETH as follows:-
Plain English Mortaaae Form

C. THE MORTGAGE
1. What the mortgagor conveys to the mortgagee

1) The mortgagor* as beneficial owner conveys to the mortgagee* by

way of mortgage

a) the goods* (including the goods in clause 3 of the

DETAILS OF MORTGAGE which are owned by the
mortgagor and which are on the premises* or which the
mortgagor brings onto the premises for business purposes;
and

b) the goodwill, trade or busincss name, and books of account

of each business connected with the premises; and

C) cheques, promissory notes and other negotiable instruments

connected with each business; and

* See Schedule
 Mortgage Form Original

Assignment 1. THE Mortgagor as beneficial owner HEREBY ASSIGNS

ASSURES AND SETS OVER unto the Mortgagee:
(a) The Chattels set out in the Schedule hereto and
the goodwill of each business carried out on the
premises and agrees that the legal title in the
Chattels set out in the Schedule hereto z.nd each
said business is hereby vested in the Mortgagee;
(6) All goods Chattels including stock-in-trade plant
and equipment fixtures and fittings whatsoever
whether of a like or different nature to those
described in the Schedule hereto which shall at
any time hereafter belong to the Mortgagor and
be brought into or onto the premises for the
purposes of or in connexion with a business
carried on or to be carried on by the Mortgagor
(to the intent that legal title therein shall pass to
the Mortgagee on the Mortgagor bringing such
goods Chattels plant and equipment stock-in-
trade fixtures and fitting within the foregoing
description);

(c) The goodwill of every trade or business which

the Mortgagor may carry on in from or in
connexion with the premises and the trade name
or style of each such business; and
(d) All books of account promissory notes bills of
exchange and other negotiable instruments
representing or evidencing debts due or which
may become due to the Mortgagor in connexion
with any business the goodwill whereof is hereby
assigned or intended so to be;
TO HOLD the same unto the Mortgagee absolutely SUBJECT
ALWAYS to the proviso for redemption hereinafter contained.
Plain English Mortgage Form

d) any entitlement to the goods which are on or are brought

onto the premises; and

e) any lease* of the premises for the rest of its term except
the last day.

2) ,The mortgagor agrees that if the legal title to any goods listed on
page 5 is not vested in the mortgagor at the time of this mortgage,

a> the mortgagor will acquire title and possession of the goods
free of any encumbrance; and

b) the title will vest in the mortgagee on the first of the

following events:

i) the delivery of all or part of the goods to the

mortgagor or as directed by the mortgagor;

ii) the installation of all or part of the goods;

iii) the use of all or part of the goods by the mortgagor;

iv) any payment by the mortgagor to the mortgagee;

V) any other conduct by the mortgagor which

recognises this mortgage; and

c) on request by the mortgagee and at the mortgagor's

expense, the mortgagor and all other persons having any
interest in the goods will do everything necessary to
complete the mortgagor's title.

* See Schedule
 Mortgage Form Original

Leasehold of 5. WHERE the Mortgagor is not the owner of the freehold

Premises of the premises but is or will be entitled to occupancy or
possession under a Lease (as hereinafter defined) the
Mortgagor as beneficial owner hereby demises unto the
Mortgagee all the property comprised in and demised by
that Lease to hold the same unto the Mortgagee for the
unexpired residue of the term granted by the Lease
(except the last day thereof) subject to the proviso for
redemption hereinafter contained.
Future 2. IN the event of legal title to the Chattels described in the
Goods Schedule hereto or any part thereof not having vested in
the Mortgagor at or prior to the execution of these presents
the Mortgagor covenants to acquire such legal title and
possession of the Chattels free from all encumbrances
and that the legal title to the Chattels and each part
thereof shall at or after the acquisition thereof by the
Mortgagor vest in the Mortgagee on the happening of
any of the following events (whichever shall first occur):
(a) The delivery to or installation of the Chattels or
such part thereof to the Mortgagor or his order.
(b) The use of the Chattels or such part thereof by
the Mortgagor.
(c) Any payment by the Mortgagor to the Mortgagee.
(d) Any other act or conduct of the Mortgagor
acknowledging this security.
AND the Mortgagor further covenants that the Mortgagor
and all persons having or rightfully claiming any estate
or interest in the mortgaged property or any part thereof
will from time to time and at all times thereafter upon
request by the Mortgagee and at the cost of the Mortgagor
until sale and afterwards at the expense of the person or
persons requiring the same execute and do all such lawful
assurances and things for further or more perfectly
assuring the mortgaged property and each part thereof to
the Mortgagee and those deriving title under the
Mortgagee as the Mortgagee may require.
Plain Enalish Mortgage Form

D. CONDITIONS THE MORTGAGOR MUST COMPLY WITH

Payment

To pay principal and interest

The mortgagor* must pay on time all amounts due in accordance with
clause 4 of the DETAILS OF MORTGAGE. Payments are to be applied to
reduce interest before principal. If a payment is not made when due, simple
interest at the rate stated in clause 4 of the DETAILS OF MORTGAGE is
payable until the amount is paid. That interest accrues and is recoverable
from day to day. Money.paid when that interest is due is to be applied first
to pay the interest.

Goods*
3. Totakecareofthegoods
The mortgagor* must

a) take the care of a cautious and prudent owner to prevent any of the
goods* being lost or damaged; and

b) keep them in good repair (but the mortgagor does not have authority
to pledge the mortgagee's* credit or to create any lien over the
goods); and

* See Schedule
- - Mortgage Form Original

Covenant to
Pay Principal T H E Mortgagor HEREBY COVENANTS with the
and Interest 3. Mortgagee as follows:
(a) T o pay interest on the amount of the daily
balance outstanding from time to time of the
principal sum at the rate of interest stated in the
Schedule hereto and (subject to Clause 3 (b)) to
continue to pay to the Mortgagee instalments (to
be applied firstly in reduction of interest then of
principal) of the number and amount and at the
times specified in the Schedule hereto until the
principal sum together with interest at the said
rate has been satisfied in full, when the
Mortgagor's liability in respect of instalments
shall cease. If the final instalment does not suffice
to pay the balance of principal the Mortgagor
shall pay the Mortgagee such balance along with
the final instalment.
(c) T o pay simple interest at the rate stated in the
Schedule hereto on payments or other moneys
which have become due and payable under sub-
clause (b) above or otherwise (so far as the same
is not prohibited by law) from the date of default
until the moneys are paid; such interest shall
accrue and be recoverable from day to day
PROVIDED T H A T any sums paid by the
Mortgagor after the Mortgagee shall have become
entitled to interest under this sub-clause (c) shall
be applied firstly in payment of such interest.
Further 6. T H E Mortgagor F U R T H E R COVENANTS A N D
Covenants AGREES with the Mortgagee as follows:

(e) That the Mortgagor will use the care of a cautious

. and prudent owner and to that intent to use and
service the same and see that they are used and
serviced by the Mortgagor his servants and/or
agents and other persons strictly in accordance
with the manufacturer's instructions and/or
recommendations for proper use and servicing.
(a) T o maintain all Chattels in good repair
PROVIDED THAT the Mortgagor shall not
have or be deemed to have any authority to pledge
the Mortgagee's credit or create any lien over the
Chattels for repair or otherwise.
Plain English Mortgage Form

to make sure that they are used and serviced in accordance with the
manufacturer's instructions and recommendations; and

4 tell the mortgagee in writing immediately any of them are lost or

damaged; and

e) .replace any of them which are damaged beyond repair.

4. To obtain the mortgagee's consent before parting with goods or goodwill

The mortgagor* must not without the mortgagee's written consent

a> hire, dispose of, part with possession of, or encumber any of the
goods* or an interest in any of them or authorise another person to
do so except as a result of the sale of stock-in-trade in the ordinary
course of business; or

dispose of or encumber the goodwill including an interest in it or

authorise another person to do so; or

remove any motor vehicle, boat, or vessel included in the goods

from Victoria; or

4 remove any of the other goods from the premises* except as a result
of the sale of stock-in-trade in the ordinary course of business.

* See Schedule
 Mortgage Form Ori~inal

6. (m) T o notify the Mortgagee in writing immediately

following the loss of or damage to the Chattels
howsoever caused.
(z T o replace with articles of a similar nature any
of the Chattels which may be damaged beyond
repair.
(c) Not without the Mortgagee's prior written
consent to sell hire dispose or part with possession
of or otherwise encumber the Chattels or any of
them or any interest therein or agree so to do or
authorise any person so to do and where the
goodwill is assigned not without the Mortgagee's
prior written consent to sell dispose of or
encumber the goodwill or any interest therein or
agree to do or authorise any person so to do
PROVIDED HOWEVER that the Mortgagor
may sell any stock-in-trade in the ordinary course
of business without obtaining the aforesaid
consent.
(b) Not without the Mortgagee's prior written
consent to remove any motor vehicle boat or
vessel included in the Chattels from Victoria or
any other Chattels from the premises subject to
the proviso contained in sub-clause (c) of this
Clause.
Plain English Mortgage Form

5 . Not to conceal goods or attach them as fixtures

1) The mortgagor* must not conceal the goods*, pan with possession
or control of them, or alter them or any identifying number'or
mark on them.

2) T h e mortgagor must not attach any of the goods to the premises*

in such a way that they become fixtures, If the mortgagor does
attach goods in that way, he or she must, on the mortgagee's request,
,get the owner and each other person with a secured interest over
the premises where the goods have become fixtures to acknowledge
a the mortgagee's rights.

Insurance
6 . To insure the goods, pay premiums, do nothing to affect a claim etc

1) The mortgagor* must

a) insure the goods* in the name of the mortgagor and the

mortgagee* for their full insurable value against fire, theft,
accident and any other risks that the mortgagee may
require; and

b) pay all premiums and produce proof of payment by the

due date; and

c) not do anything or fail to do anything which would allow

the insurer to refuse or reduce a claim.

2) The mortgagee is entitled to receive all amounts which are payable

to the mortgagor by any insurer or by any other person because the
goods are lost or damaged, up to the amount the mortgagor owes
under the loan contract.

* See Schedule
 Mortgage Fomz Original

6. (n) Not to conceal the Chattels or to part with

personal possession or control of the same
without the Mortgagee's previous consent in
writing or to alter them or any identifying
number or mark.

(0) Not without the prior written consent of the

Mortgagee to attach any of the Chattels to any
freehold in such a manner that they become
fixtures and in the event of such attachment to
procure on request by the Mortgagee an
acknowledgement protecting the title of the
Mortgagee to such fixtures from the owner of
and every person holding a mortgage or security
interest in such freehold.

(j) The Mortgagor will insure the Chattels and at

all times during the continuance hereof keep the
same insured under an enforceable policy in the
Mortgagor's name and the Mortgagee's name for
their respective rights and interests for the full
insurable value thereof against fire theft and
accident and such other risks and subject to such
terms conditions and exceptions as the Mortgagee
may require and shall pay all premiums payable
and produce proof of payment to the Mortgagee
on or before the due date and that the Mortgagor
will not do anything at any time to contravene
any term of such policy.

(g) T o prevent the whole or any item of the Chattels

being at any time used kept or otherwise situate
in any manner which would if they became then
lost stolen or damaged permit the insurer thereof
to decline a claim in respect thereof whether
under any condition or exclusion contained in
the policy or otherwise.
(k) T h e Mortgagee is HEREBY IRREVOCABLY
AUTHORISED to appropriate any insurance or
other moneys received by it in respect of loss of
or damage to the Chattels toward any debt
payable by the Mortgagor to the Mortgagee.
Plain English Mortgage Form

3) The mortgagee is the mortgagor's agent to make and compromise

any claim for loss or damage to the goods.

4) . The mortgagor authorises the mortgagee to use any amount received

in respect of loss or damage to the goods

a> to reduce the debt owed by the mortgagor under the loan
contract; or

6) to repair or replace the goods.

Premises

7. To obtain consent of others to mortgage

The mortgagor* must obtain from the landlord or other person who holds
a security over the premises* from the mortgagor an agreement

a) to this mortgage; and

b) to the mortgagee* being permitted to make good a default by the

mortgagor under the lease* or security; and

c> to the assignment of the mortgagor's rights to the mortgagee or a

solvent and responsible nominee of the mortgagee if the mortgage
becomes enforceable.

* See Schedule
 Mortnane Form Original

6. (j) The Mortgagee shall be entitled to receive all

moneys payable to the Mortgagor or the
Mortgagee and the Mortgagor by any insurer
under any relevant policy or by any other person
in respect of damage to or loss of the Chattels (to
the extent of indebtedness) and the Mortgagor
appoints the Mortgagee his attorney to recover
and/or compromise in its and/or the Mortgagor's
name any claim for loss or damage under the
policy or otherwise and to give effectual releases
and receipts for the same.
(1) The Mortgagee may at its discretion apply the
balance of moneys received by it after deduction
of any debt presently payable hereunder either
in reinstating or replacing the Chattels damaged
or lost or in or towards satisfaction of the moneys
secured.

(t) T h a t the Mortgagor will procure for the

Mortgagee an agreement from the landlord or
person holding a mortgage or security from the
Mortgagor consenting to the Mortgagor giving
this security to the Mortgagee and agreeing that
in the event of the Mortgagor making default in
payment hereunder or committing any breach
hereof or a receiver or receiver and manager
being appointed hereunder and/or in the event
of the Mortgagor defaulting under his lease
mortgage or other security in the payment of
rent other moneys or otherwise that the said
' landlord or other person will permit the
Mortgagee to remedy the default of the
Mortgagor and will consent to the assignment of
the Mortgagor's rights to the Mortgagee or at the
Mortgagee's request to a respectable responsible
and solvent person nominated by the Mortgagee.
Plain English Mortgage Form

8. To observe conditions of lease of premises

The mortgagor* must

a) pay punctually the rent under any lease* for the premises*; and

b) comply with the conditions of the lease; and

'
c) exercise all options to renew the term of the lease;

9. Not to part with possession of lease

The mortgagor* must not without the mortgagee's* consent

a) assign or encumber the lease*; or

b) sublet the premises* or part with possession of them; or

4 enter into any agreement regarding them; or

d) surrender the lease partly or completely; or

el do anything or allow anything to be done which may result in the

lease being brought to an end, or forfeited, or its term shortened; or

fi do anything or allow anything to be done which may prejudice the

lease or this mortgage; or

g> sell, part with possession of, or encumber an interest in the premises
which the mortgagor has otherwise than as lessee.

10. Not to prejudice mortgagor's right to occupy premises

The mortgagor* must not do or allow anything to be done which may
prejudice the mortgagor's right to occupy the premises*.

* See Schedule
 Mortgage Form Original

6. (u) Where the Mortgagor is not the owner of the

freehold of the premises but is or will be entitled
to occupancy or possession under a Lease the
Mortgagor further covenants:
(i) T o pay punctually during the
continuance of this security the rent
reserved by the Lease;
(ii) To observe and perform the covenants
and provisions thereof binding on the
Mortagagor as lessee;
(v) Duly to exercise all options for the
renewal of the term of the Lease.

(iii) Not without the Mortgagee's prior

written consent further to assign
mortgage charge or otherwise encumber
the Lease nor sub-let or part with
possession of the premises nor enter into
any agreement regarding the same;
(iv) Not without the Mortgagee's prior
written consent to surrender the Lease
wholly or in part or give any notice of
determination thereof or do or permit
or suffer to be done any act or default
matter or thing whereby the Lease may
be determined or forfeited or the term
thereof shortened or whereby the Lease
or this security may in any way be
prejudicially affected;
(q) Where the Mortgagor has any interest in the
. premises otherwise than as lessee not to sell part
with possession vacate or encumber that interest
in the premises without the prior written consent
of the Mortgagee.
(s) Not to do or suffer any act matter or thing
whereby the Mortgagor's right to occupy the
premises may be prejudiced or adversely affected.
Plain English Mortgage Form

1 1. To conduct business carefully and eficiently

The mortgagor* must carefully and efficiently carry on each business
conducted at the premises*.

Miscellaneous
1 2. To preserve goodwill
During the mortgage and for a period of 2 years after the sale or disposal of
the gooslwill of any business as part of the enforcement of this mortgage,
the mortgagor* must not be concerned or interested, directly or indirectly
(even merely as a shareholder), in a business that is substantially similar to
any of the businesses connected with the premises within a distance of 5
kilometres from the premises.

1 3. To pay rent, taxes etc.

The mortgagor* must

a) pay all rents, taxes, rates and other charges which are or become
payable on

i) the premises*;

ii) the goods*;

iii) any land where the goods are; and

6) produce receipts for these payments on request.

* See Schedule
 Mortgage Form Original

6. (h) Where any trade or business is being carried on

upon the premises to carry on such trade or
business in a diligent and efficient manner.

Preservation 4. EACH Mortgagor FURTHER COVENANTS AND

of Goodwill AGREES with the Mortgagee and with each and every
assignee from the Mortgagee or from any receiver
appointed by the Mortgagee that during the continuance
of this security and for a period of two years after any sale
or disposal upon or after this security shall have become
enforceable of the goodwill of the business carried out on
the premises or of the goodwill of any trade or business
which the Mortgagor may before such sale or disposal
carry on in from or in connexion with the premises the
Mortgagor shall not within a distance of five kilometres
in a direct line from any part of the premises directly or
indirectly undertake or carry on or be concerned engaged
or interested either alone or in partnership with or as
shareholder manager servant or agent of any other person
firm or company or otherwise in a business of any nature
the same or substantially similar to any trade or business
now carried out on the premises or hereafter during the
continuance of this security to be carried on in from or
in connexion with the premises by the Mortgagor.

6. (d) T o pay all rents taxes and rates and other charges
which now or hereafter may become due and
payable for or in respect of the premises or
Chattels and for or in respect of any land or
tenements in or upon which such Chattels or
any of them may be and to produce to the
Mortgagee on demand all receipts for such rents
rates taxes and other charges.
Plain English Mortgage Form -

14. To comply with the law

T h e mortgagor* must comply and ensure that others comply with all laws
and notices which apply to the goods*, the business, or the occupier of the
premises*.

15. Not to cancel powers of the mortgagee

The mortgagor* must not cancel any of the powers or authorities given to
the mortgagee* by this mortgage.

16. To pay fees, duties, costs and expenses

The mortgagor* must pay to the mortgagee*

a) any legal fees to prepare, enforce, and discharge this mortgage; and

b) any stamp duty or financial institutions duty payable on the mortgage

and on receipts of money from the mortgagor; and

C) the costs of registering the'm~rtga~ee's

interest in any of the goods*
under any Act; and

4 the amount which the mortgagee pays to make good a default by

the mortgagor; and

e) any expenses which the mortgagee incurs in enforcing this

mortgage.

17. To allow mortgagee to enter premises

The mortgagor* must allow the mortgagee* or a representative to enter at
reasonable times as agent of the mortgagor any premises* where the goods*
are believed to be in order to inspect them, whether or not the mortgagor
has control of the premises.

* See Schedule
 Mortnaae Form Original

6. (r) T o comply with all statutory provisions

regulations and by-laws from time to time in
force in respect of the Chattels or by and upon
the occupier of the premises and every part
thereof and also any lawful notices thereunder
and to cause such statutory provisions regulations
by-laws and notices to be observed and complied
with.
@) That the Mortgagor will not revoke or annul any
of the powers and authorities hereby given to the
Mortgagee.

(2) T o pay to the Mortgagee its expenses (including

stamp duty and financial institutions duty) of and
incidental to the preparation stamping
enforcement and discharge of this instrument
every receipt of money from the Mortgagor and
the registration of the Mortgagee's interest in
respect of any of the Chattels under any Act
including the Chattel Securities Act 1981.
(w) T o repay to the Mortgagee upon demand any
moneys which the Mortgagee may see fit to pay
to make good any failure by the Mortgagor to
comply with any obligations hereunder or any
obligation which the Mortgagee may incur in
. the enforcement of this instrument.

[See 6 (v)-reproduced opposite 22.1

Plain English Mortgage Form

E. ENFORCEMENT
18. Circumstances when mortgagee may enforce the mortgage

The mortgagee* may enforce the mortgage if

a> the mortgagor* provided false information or made a false

representation to the mortgagee in relation to the application for
the loan of the principal sum; or

b) .the mortgagor is in breach of the mortgage for 14 days after notice

. from the mortgagee specifying the breach and requiring that it be
corrected or, if it cannot be corrected, that compensation be paid;
or

c> a receiver or receiver and-manageris appointed in respect of all or

part of the mortgagor's assets or income; or

4 execution or distress is levied against any of the mortgagor's goods*.

19. Receiver
The mortgagee* may appoint a receiver in accordance with the Property
Law Act 1958 Part 2 Division 3. The receiver acts as the agent of the
mortgagor* and the mortgagee is not responsible for his or her acts or
omissions. T h e receiver has the powers of the mortgagee under this
mortgage.

* See Schedule
 Mortgage Form Original .

Default 7. I T is agreed that:

7. (a) This security shall become enforceable by the

Mortgagee upon the happening of any one or
more of the following events:
(i) If any information or representation
supplied by the Mortgagor with respect
to the application for the loan of the
principal sum proves to be untrue;

(ii) If the Mortgagor shall make default in

the due payment of any moneys payable
hereunder or shall make default in the
observance or performance of any
covenant or provision binding on him
hereunder (expressly or by implication)
and such default shall continue for
fourteen days or more after notice from
the Mortgagee to the Mortgagor
specifying such default and requiring
remedy of the same or if incapable of
remedy, compensation for the same.

(iii) A receiver or receiver and manager is

appointed in respect of the whole or any
part of the Mortgagor's assets or income;
or
(iv) Execution or distress against the
Mortgagor or any of the Mortgagor's
goods is levied.
(b) (iv) Any receiver appointed by the
Mortgagee may enter into possession of
the premises on which the Chattels are
situated and may manage and carry on
for such time as it thinks fit any business
of the Mortgagor in as full and ample a
manner as the Mortgagor might do or
may close down and/or wind up such
business and receive all sums payable in
respect thereof; and any such receiver
shall be in all respects the agent of the
Mortgagor and the Mortgagee shall in
no way be responsible for his acts or
omissions;
(v) Any receiver appointed by the
Mortgagee shall have for the purpose of
the exercise of his powers any powers
conferred upon the Mortgagee
hereunder;
Plain English Mortgage Form

20. Power of Attorney

T h e mortgagor* gives the mortgagee* and any receiver or manager an
irrevocable power of attorney

a) to do anything which the mortgagor should do or which the

mortgagee considers necessary or desirable to protect the
mortgagee's rights and powers; and

6) to enter into, vary, surrender, or assign a lease* or a sub-lease of

premises* where a business of the mortgagor is or is to be carried
on; and

C) to manage any business covered by the mortgage in place of the

mortgagor, or to close it down and wind it up, if the mortgage
becomes enforceable; and

4 to act on behalf of the mortgagor in present or future legal

proceedings.

* See Schedule
 Mortgage Form Original

Power of 8. FOR the consideration aforesaid the Mortgagor HEREBY

Attorney IRREVOCABLY APPOINTS the Mortgagee and any
receiver or receiver and manager appointed hereunder
severally as the true and lawful attorneys of the Mortgagor
to do any one or more of the following acts matters or
things, namely:
(a) T o do any act matter or thing including the
execution of documents or the payment of
moneys which the Mortgagor ought to do
hereunder or which the Mortgagee may consider
necessary or desirable in the protection of its
rights and powers hereunder including (without
limiting the generality of the foregoing) to do
and execute all acts deeds and things for securing
or perfecting if necessary or as to the Mortgagee
or the said attorney shall deem expedient the
assurance and transfer to the Mortgagee of the
mortgaged property and each part thereof and to
execute in favour of the Mortgagee or its assigns
all legal mortgages transfers assignments and
assurances of the mortgaged property and each
part thereof.
(b) On behalf of the Mortgagor to enter into any
lease of the premises or any other premises where
the business of the Mortgagor may be or may be
proposed to be carried on to vary or surrender
any lease or such premises, to enter into sub-
leases, and to assign any lease or sub-lease and to
obtain any necessary consent on any terms which
to such attorney shall seem proper.
(c) In the event that the Mortgagee becomes entitled
to require payment of the balance of the moneys
payable hereunder to manage and carry on for
- such time as such attorney thinks fit the business
of the Mortgagor in as full and ample a manner
as the Mortgagor might himself do or close the
same down and wind it up and to receive all sums
payable in respect thereof and to give effectual
receipts and releases for the same. '
(d) Instead of acting personally in the exercise of
any powers hereunder to appoint servants or
agents to exercise the same.
Plain English Mortgage Form
- -

General powers of the mortgagee on enforcement

When enforcing the mortgage, the mortgagee*

a) may demand payment of the balance of the principal plus interest

up to the date of the demand. The balance of the principal plus
interest becomes payable on the day following the day when the
, demand is delivered to the mortgagor*; and

b) has the powers implied under the Property Law Act 1958 even if

i) the mortgagee has not served a notice on the mortgagor

under section 101;

ii) this mortgage is not a deed;

iii) the mortgage has become enforceable for reasons other

than default in payment under the mortgage; and

* See Schedule
-
Mortgage Form Original

8. (e) T o institute proceed with compromise or defend

any legal proceedings in the name of the
Mortgagee and the Mortgagor or the Mortgagor
alone and to appeal from or enforce any judgment
or order obtained therein.
3. (6) If this security shall become enforceable as is
provided in Clause 7 hereof the balance of
principal remaining outstanding together with
the due proportion of interest calculated up to
the date of the demand hereinafter referred to
shall become forthwith due and payable at the
option of the Mortgagee on the day following
demand by the Mortgagee. Such demand shall
be deemed made when the same is delivered to
the Mortgagor or one of them personally or when
a prepaid letter containing the same and
addressed to the Mortgagor or one of them at the
address herein or the address last known to the
Mortgagee is placed in the post; in the case of
there being more than one Mortgagor demand
on one only shall be deemed a demand on both
or all.
7. (6) Upon this security becoming enforceable the
Mortgagee may exercise any of the following
powers or such combination thereof as to the
Mortgagee seems fit:
(ii) If by reason of this instrument not being
duly sealed and delivered as a deed or
otherwise the powers implied in favour
of the Mortgagee under the Property
Law Act 1958 do not apply the
Mortgagee is HEREBY EMPOWERED
to exercise powers co-extensive with
those implied in favour of a mortgagee
and of a mortgagee by deed under the
said Act but varied to the extent provided
in paragraph (9 of this sub-clause;
(i) The powers implied in favour of a
Mortgagee under the Property Law Act
1958 but so that such powers shall be
exercisable without the necessity of first
serving any notice on the Mortgagor
(save as hereinbefore provided) and so
that the powers set forth in the
Plain English Mortgage Form

c) , has equivalent powers in respect of goodwill and business names;

and

4 also has power to require the mortgagor to

i) assign the lease* of the premises* or sublet them;

.ii) assign the business names;

iii) do anything necessary or desirable to assist in an assignment

or sublease; and

e) may enter any premises (whether or not the mortgagor controls

them) where the mortgagee believes the goods* are; and

f) may seize the goods.

22, Indemnity
The mortgagor* agrees to indemnify the mortgagee* for any resulting
liability arising from those acts of the mortgagee referred to in clause 17
and paragraphs e) and f ) of clause 2 1.

* See Schedule
 Mortgage Form Original

second paragraph of Part 111 of the

Fourth Schedule to the said Act shall be
exercisable whether the ground on
which the security has become
enforceable consists of default in
payment of moneys or interest or
otherwise;

(b) (vi) I T IS EXPRESSLY AGREED AND

DECLARED that the powers of sale
vested in the Mortgagee include power
to sell not only the Chattels but also the
goodwill and business name of the
business and in connexion with any such
sale power to require the Mortgagor to
assign the lease of the premises in or
from which the said business is
conducted, or sub-let the same and to
assign the Mortgagor's business name
and the Mortgagor covenants to do all
things necessary or to enable any such
assignment or sub-lease to be effected.

(iii) Except to the extent (if any) prohibited

by law the Mortgagee may seize and take
possession of the Chattels or any of them
and for this purpose may enter the
premises or any other premises whether
or not controlled by the Mortgagor
where such goods or effects are believed
to be as the act of the Mortgagor; the
Mortgagor HEREBY INDEMNIFIES
the Mortgagee against liability for
' anything done under this sub-clause;
6. (v) The Mortgagee its servants and agents shall be
at liberty to enter as the act of the,Mortgagor the
premises or such other premises whether or not
controlled by the Mortgagor where the
Chattels are believed to be situated at all
reasonable hours for the purpose of inspecting
the same. T h e Mortgagor HEREBY
INDEMNIFIES the Mortgagee against any
liability it may incur under this sub-clause.
Plain English Mortgage Form

F. GENERAL
23. Time to perform obligations
Time is of the essence of the mortgagor's* obligations and a waiver of
default or of any obligation does not prevent the mortgagee* from exercising
its rights in relation to a continuing or recurring breach.

24. Service of notices by mortgagee

1) The mortgagee* may serve any notice or demand on the mortgagor*

at the mortgagor's last known address. If posted, it is taken to have
been received in the ordinary course of post whether received or
not.

2) A demand on one of a number of mortgagors is a demand on all of

them.

25. Acceptance of bill of exchange or promissory note does not affect mortgage
The rights, powers and duties under this mortgage are not suspended or
merged if the mortgagee*

a) accepts a bill of exchange or a promissory note from the mortgagor*;

or

b) commences legal proceedings against the mortgagor or obtains any

order or judgment in those proceedings.

* See Schedule
 Mortgage Form Original

6. (x) No time or other indulgence granted to the

Mortgagor shall operate as a waiver of the
Mortgagee's rights in respect of any continuing
or recurring breach.
7. (c) Time shall be of the essence of all the Mortgagor's
obligations hereunder and waiver by the
Mortgagee of any default by the Mortgagor shall
not be deemed to be a waiver of any continuing
or recurring default.

6. (y) The Mortgagee may serve any notice or demand

upon the Mortgagor at his address appearing
herein or by leaving the same for him there or
by posting the same to him by prepaid post
addressed to him at such address and if posted
any such notices or demands shall be deemed to
have been received on the day following the date
of posting whether actually received or not.
Notice to or demand on one Mortgagor only (in
the event of there being more than one
Mortgagor) shall be deemed demand on or notice
to both or all. The Mortgagee's rights may be
exercised by it or by its nominees or assigns and
it shall be entitled to assign either absolutely or
by way of security its rights hereunder
PROVIDED ONLY that such assignment is
subject to the Mortgagor's rights in accordance
with this instrument.
(d) The taking by the Mortgagee of any bills of
exchange or promissory notes from the
Mortgagor the taking of legal proceedings
thereon or any order or judgment in any
proceedings shall not be deemed to suspend or
merge the Mortgagor's covenants for repayments
. herein or the accrual of interest or the rights or
powers conferrred on the Mortgagee hereby and
any such bill of exchange promissory note order
or judgment shall be deemed collateral only.
Plain English Mortgage Form

26. Receipt when principal and interest repaid

If the mortgagor* has repaid the principal and interest and has complied
with the conditions of the mortgage the mortgagee* must complete at the
mortgagor's expense a receipt referred to in section 115 of the Property Law
Act 1958 or any other reconveyance (which must be prepared by the
mortgagor) that the mortgagor may reasonably require.

27. Nominee may exercise mortgagee's rights

Any powers or directions given to the mortgagee* under this mortgage may
be exer-cisedby the mortgagee's nominee.

28. Joint and individual liability

If there is more than one mortgagor* their covenants are joint and individual.

* See Schedule
 Mortgage Form Original

Redemption 9. PROVIDED ALWAYS that if the Mortgagor shall pay

to the Mortgagee the principal and interest thereon as is
hereinbefore provided and shall not be in breach of any
covenant to be observed and performed by him the
Mortgagee sha!l at the expense of the Mortgagor execute
the receipt contemplated by Section 115 of the Property
Law Act 1958 or such other reassignment prepared by
the Mortgagor as the Mortgagor may reasonably require.

10. (b) Any powers or discretions vested in the

Mortgagee may be exercised by the Mortgagee
or its nominee or nominees.

(see 10 (c)-reproduced opposite Schedule.]

Plain English Mortgage F m

SCHEDULE
Meaning of Words
'Goods' includes an addition to goods; and all plant, equipment,
stock-in-trade, fittings or fixtures
'Lease' means the whole or part of any leasehold estate, or interest,
tenancy, licence, or right to possession of the premises.

'Mortgagor' and 'mortgagee' include those persons named in the

DETAILS OF MORTGAGE and all other persons who in law
'derive title from those persons.

'Premises' means the place named in Clause 1 (b) (ii) of the

DETAILS OF MORTGAGE.
 Mortgage Form Original

Interpretation 10. (a) In this instrument unless the context otherwise

requires:
"Chattels" means the Chattels described in the
Schedule hereto and includes also all goods and
effects whether of a like or different nature to
those described in the Schedule hereto which
shall at any time hereafter belong to the
Mortgagor and be brought on to the premises.
"Goodwill" means the goodwill of any trade or
business which the Mortgagor may hereafter
carry on in from or in connexion with the
premises in which Chattels may hereafter be.
"Lease" means any leasehold estate or interest
tenancy licence or right to possession of the
premises or any part thereof now or hereafter at
any time during the continuance of this security
vested in the Mortgagor.
(c) The terms "Mortgagor" and "Mortgagee" where
the context permits shall be deemed to include
transferees executors administrators and other
persons deriving title under those respective
parties and in the case of a company shall include
its successors and assigns where there is more
than one Mortgagor the covenants on their part
shall be deemed joint and several and the term
"Mortgagor" shall include the Mortgagors and
each of them; words importing the masculine
gender shall include also the feminine and where
a company is concerned shall include also the
neuter and words importing the neuter gender
shall include also the masculine and feminine
gender; "mortgaged property" includes the whole
of the property and assets hereby mortgaged or
intended to be .
(d) Marginal notes herein are for convenience only
and shall not be taken into account in the
construction hereof.
 Mortgage Form

Analysis of Defects in Original Document

Original version

Language

1 The original version contains numerous lengthy sentences. T h e first

sentence, commencing 'This indenture ...', is more than 170 words long;
the second almost 250. Sentences reaching or approaching 100 words
are common. T h e document also contains several unnecessary
qualifications. One example is the passage 'but varied to the extent
provided in paragraph(z1 of this sub-clause' at the end of subparagraph
7 (b) (ii). The qualification is unnecessary because subparagraphs (11
and (ii) would be read together anyway, producing exactly the result
which the qualification is supposed to achieve. Another example is the
passage commencing 'words importing the masculine gender ...' at the
end of paragraph 10 (c). T h e definitional points made in this passage
are unnecessary because the ordinary rules for interpreting a document
would themselves lead unerringly to the conclusion which the definitions
require. No-one would be misled by the use of the masculine gender in
a commercial document.
Unnecessary material is also included in the document through excessive
caution. It would have been sufficient to say in paragraph 7 (b) that 'the
mortgagee may exercise any of the following powers' without adding
'or such combination ... as -the mortgagee deems fit'. And it was
unnecessary to include the reference to servants and agents of the
mortgagee in pnragraph 6 ( v ) . It is a general principle that a person
may use a servs.lt or agent to exercise the powers which he or she has,
whether by law or by private agreement. Recognition of this principle
is implicit in other parts of the document where powers are conferred
on the mortgagee, but no reference is made to his or her servants or
agents.
3 The document contains a number of other linguistic defects. The passive
is sometimes used where it is quite unnecessary and where the active
would be simpler. 'It is expressly agreed and declared' (subparagraph 7
(b) (vi)) is not as straight forward as 'we expressly agree and declare'.
Archaisms are used, such as 'indenture', 'witnesseth', 'whereas', 'these
presents', 'covenants' and 'execute', and there are tautologies, such as
'observe and perform' (subparagraph 6 (u) (ii)), 'permit or suffer'
(paragraph 6 (u) (iv)), 'agreed and declared' (subparagraph 7 (b) (vi))
and 'in accordance with and subject to' (paragraph 6 Cy). And there is
persistent and unnecessary use of cross-referencing words such as
'hereby', 'hereunder', 'hereafter', 'hereinafter', 'hereinbefore', 'hereto',
'therein', 'thereof and 'aforesaid'. These add nothing to the meaning
of the document and substantially impair its intelligibility.
Structure
4 The structure of the original document is defective. The long list of
particulars on which the parties agree in clauses 6 and 7 is not set out
in a fully coherent order. One example is the location of a paragraph
dealing with the duty of the mortgagor to carry on his business efficiently
 M o r t m e Form

(paragraph 6 ( h ) )between paragraphs concerned with the protection of

chattels and their replacement (paragraph 6 (g)and (i)).Another is the
location of a paragraph dealing with the manner of serving a notice on
the mortgagor (paragraph 6 (y))in a clause some distance from, and
before, the one which requires the mortgagee to give a notice to the
mortgagor (subparagraph 7 (a) (ii)). A third is the inclusion in the list
of a paragraph dealing, among other things, with the consequences of
default by the mortgagor (paragraph 6 (w)), when it would have been
more appropriate to include it in the following clause which deals
specifically with default. A final example is paragraph 6 (P) which is
located in the middle of the list of further covenants relating to
mortgagor's promise not to revoke any power or authority given to the
mortgagee. This provision is general in its application and has no
particular relationships with either the previous or the following
paragraphs, which deal respectively with not allowing chattels to become
fixtures, and not disposing of the mortgagor's interest (other than as
lessee) in the premises.
5 The document's greatest structural defect, however, lies in its internal
inconsistencies. Clause 1 constitutes the assignment of the mortgagor's
chattels and the goodwill of the business. It is internally inconsistent in
referring to 'business' alone in paragraph 1 (a), while referring to 'trade
or business' in paragraph 1 (c). But worse follows. Clause 1 covers the
'Chattels set out in the Schedule' and 'all goods Chattels (including
stock in trade plant and equipment fixtures and fittings ... which shall
at any time ... belong to the Mortgagor and be brought ... onto the
premises [for business purposes]'. Yet the term 'Chattels' is defined in
paragraph 10 (a) to mean the 'Chattels described in the Schedule ...' and
to include goods and effects which 'shall at any time ... belong to the
Mortgagor and be brought onto the premises'. T h e restriction in
paragraph 1 (b) to chattels brought onto the premises for business
purposes is missing from paragraph 10 (a). The precise interaction
between paragraphs 1 (a), 1 (b)and 10 (a) can only be guessed at. Clause
1 also has other problems. Paragraph 1 (a) covers both chattels and
goodwill. The goodwill is that of 'each business carried out on the
premises'. But goodwill is also covered by paragraph 1 (c). There, the
goodwill is that of 'every ... business which the Mortgagor may carry on
in from or in connexion with the premises'. But clause 10 goes further.
Paragraph 10 (a) defines 'goodwill' as the goodwill of 'any ... business
which the Mortgagor may ... carry on in from or in connexion with the
premises or any other premises in which the Chattels may hereafter be'.
Again, the correct resolution of these inconsistencies is a matter for
conjecture.

Design

6 The Law Institute's original form for a mortgage over a business also
suffers from a number of design defects. The typeface is far too small
and the document is set out in lines which are nearly twice the
recommended length. Long lines aggravate the problems caused by the
use of an inadequate type size. They tend to run together and impede
continuous reading. The document also lacks headings to break up the
 Mortgage Form

mass of type and to help readers find material easily. T h e schedule is

poorly laid out and badly positioned. Moreover, the page size is the
cumbersome B3 which presents considerable problems for filing.

Plain English version

7 T h e substance of the plain English version of the form of mortgage

over a business is much the same as the original. T h e only substantive
changes are in the removal of inconsistencies in the original which
could have led to doubts over its ambit and effectiveness. However, the
form of the plain English version is very different from that of the
original. Sentences have been shortened. The use of the passive has
been reduced. Archaisms and repetition have been avoided. Unnecessary
material which was included through an excess of caution has been
deleted. The structure has been improved. Details of the obligations
imposed on the mortgagor and the powers conferred on the mortgagee
have been listed in a more coherent order. Particular items of
information can be located more easily. T h e length of the document is
less than one half of the original. T h e costs of stationery and printing
are reduced, as well as the costs associated with reading and
understanding the document.
 Format of Legislation

APPENDIX 6

FORMAT OF LEGISLATION
In Chapter 7 of the report (para 173) the Commission recommended
that Chief Parliamentary Counsel develop a new format for legislation.
This appendix contains a comparison of the present format with a
revised one developed by the Commission. Portions of the Mental Health
Act 1986 (Vic) are reproduced on the right hand page, the revised
version being set out on the left.
Plain English Format of Legislation

Mental Health Section 16-18

1986 No. 59

4) In determining whether to make a hospital or a restricted hospital

order the Minister administering the Office of Corrections must
have regard to the public interest and all the circumstances of the
case including the person's criminal record and psychiatric history.

Division 4 Repatriation Patients

17 Repatriation patients

1) In this section repatriation patient means a person who is receiving

a pension under the Commonwealth Repatriation Act 1920.

2) The Minister may enter into an agreement with the Minister

administering the Commonwealth Repatriation Act 1920 for and
with respect to the provision of mental health services to
repatriation patients.

3) For the purposes of this Act a repatriation patient may be admitted

as a voluntary patient or an involuntary patient and all of the
provisions of this Act relating to voluntary patients, involuntary
patients or patients generally as the case may be apply.

Division 5 Patient's Rights

18 Statement of patient's rights

1) Every patient must upon admission to a psychiatric in-patient

service or before receiving any treatment under Division 1 or 2 of
Part 5 be given a printed statement-
a) advising the patient as to the legal rights and other entitlements
of patients under this Act including the right to obtain legal
representation and to have a second psychiatric opinion; and
b) containing any other information relating to the hospitalization
or treatment of the patient that the Department considers
relevant
 Format of Legislation Original

Mental Health No. 59 of 1986

(b) A restricted hospital order under which the person is admited

to and detained in a psychiatric in-patient service as a
security patient.
(4) In determining whether to make a hospital order or a restricted
hospital order the Minister administering the Office of Corrections
must have regard to the public interest and all the circimstances of the
case including the person's criminal record and psychiatric history.
Division 4-Repatriation Patients

Repatriation patients.
17. ( 1 ) In this section "repatriation patient" means a person who is
receiving a pension under the Commonwealth Repatration Act 1920.
(2) The Minister may enter into an agreement with thee Minister
administering the Commonwalth Repatriation Act 1920 for and with
respect to the provision of mental health services to repatration patients.
(3) For the purposes of this Act a repatriation patient may be
admitted as voluntary patient or an involuntary patient and all of the
provisoins ofthis Act relating to voluntary patients, involuntary patients
or patients generally as the case may be apply.
Division 5-Patient's Rights

Statement of patient's rights.

18. (1) Every patient must upon admission to a psychiatric in-
patient service or before receiving any treatment under Division 1 or 2
of Part 5 be given a printed statement-
( a ) advising the patient as to the legal rights and other
entitlements of patients under this Act including the right
to obtain legal representation and to have a second
psychiatric opinion; and
( b ) containing any other information relating to the
hospitalization or treatment of the patient that the
Department considers relevant.
Main En~lish Format of Legislation

Mental Health Section 19-20

1986 No. 59

19 Information to be provided
There must be kept at a place readily accessible to all
patients-
a) copies of this Act and the Guardianship and Administration
Board Act 1986 and any publications prepared by the
Department for the purpose of explaining the provisions of the
Acts; and

b) copies of the statement under section 18 (1); and

C) the address to which the patient may write to and the business
telephone number of the following:
i) The Board;
ii) The Public Advocate;
iii) The chief psychiatrist;
iv) The community visitors;
iv) The Legal Aid Commission of Victoria;
vi) The Ombudsman.

Part 4 Review, Discharge, leave and

transfer of patients

Division 1 Establishment, Constitution and Procedure of the

Board
20 The Mental Health Review Board

1) There is established a Board to be known as the Mental Health

Review Board.

2) The Board is to be constituted by-

a) a President; and

b) such other members as are necessry from time to time for the
proper functioning of the Board.

3) Schedule 1 has effect with respect to members of the Board.

 Format of Legislation Original

No. 59 of 1986 Mental Health

Information to be provided.
19. There must kept at a place readily accessible to all patients-
(a) copies of this Act and the Guardianship and Administration
Board Act 1986 and any publications prepared by the
Department for the purpose of explaining the provisions of
the Acts; and
(b) copies of the statement under section 18 (1); and
(c) the address to which the patient may write to and the
business telephone number of the following:
(i) The Board;
(ii) The Public Advocate;
(iii) The chief psychiatrist;
(iv) The community visitors;
(v) The Legal Aid Commission of Victoria
(vi) The Ombudsman.

PART 4-REVIEW, DISCHARGE, LEAVE AND TRANSFER OF

PATIENTS
Division 1-Establishment, Constitution and Procedure of the Board

The Mental Health Review Board.

21. (1) There is established a Board to be known as the Mental
Health Review Board.
(2) The Board is to be constituted by-
(a) a President; and
(b) such other members as are necessary from time to time for
the proper functioning of the Board.
(3) Schedule 1 has effect with respect to members of the Board.
Functions of the Board.
22. (1) The functions of the Board are as follows:
(a) To hear appeals against the detention of involuntary patients
' . and security patients;
 Rewriting Legislaion

APPENDIX 7

LEGISLATION REWRITING PROGRAM

What is the Program about?

The Legislation Rewriting Program would involve the rewriting of 50

Acts into plain English. The Acts selected for the program would be
those which are most in need of revision and which have the most
significant impact on the community. Final selection would be a matter
for Government. The Program would be completed within five years.

Management

The Law Reform Commission of Victoria should have the management

of the Program. This would be conducted at two levels. First, the
Commission would have responsibility for the actual preparation of the
plain English versions of the Acts. It has unique experience in the
rewriting of legislation into plain English. The rewriting of the
Takeovers Code (Appendix 2) developed the skills required for the task.
Secondly, the Commission would have responsibility for the coordination
of the various stages of the program. There is a need for a single
coordinating body to ensure that the rewriting of the Acts is not delayed,
particularly where a number of organisations are involved.

Consultation

Consultation would be a major element of the Program. The

Commission already extensively uses a number of different types of
consultation in its references. It regularly calls upon advice from a wide
range of experts. This was a feature of the rewrite of the Takeovers
Code. Such consultation enables it to draw on the most up-to-date
knowledge in the particular field.
The Commission also consults with the people most likely to be affected
by its recommendations. These include the organisational officers faced
with the task of implementation of the report. This form of consultation
 Rewriting Legislation

is conducted prior to any formal recommendations being made. It

ensures that the best ideas are considered, that practical problems are
sorted out, and that arguments on all sides are debated fully.

T h e Program

T h e program would follow three stages. T h e first stage would include

the redrafting and restructuring of the Act. T h e Commission would
form a team of advisers to assist it in its work. T h e relevant department
would be asked to nominate a representative.
The second stage would involve:
certification by Chief Parliamentary Counsel that the draft legislation
was an accurate restatement of the original
approval of the final draft by the responsible Minister
the tabling of the Commission's report in Parliament by the Attorney-
General.
T h e third stage would involve consideration of the draft Bill by the
Legal and Constitutional Committee. If satisfied that it was a satisfactory
replacement, the Committee would make a recommendation to both
Houses of Parliament that the Bill be passed. This recommendation
should reduce the need for extended debate. T h e Bill would, of course,
be subject to the usual Parliamentary procedures.

Costs

The cost of the entire program is estimated to be $950,000 over a period

of five years. This is based on the present cost of producing legislation
in Chief Parliamentary Counsel's Office with allowances being made
for the fact that legislation will be rewritten rather than developed from
the beginning. Original legislation costs approximately $700 for each
page. T h e program should produce some 2,500 pages of rewritten
legisation at about half the cost of producing the original legislation.
 Rewriting Forms

APPENDIX 8

PLAIN ENGLISH UNIT

Management structure

Responsibility for promotion and monitoring of the plain English

rewriting policy should be given to a specialised group. The group
would form the Plain English Unit. The Unit would consist of a Director
(of at least SES-1 level) and up to four staff with provision for secondment
of additional staff as required. All the professional staff should have
exceptional skills and experience in the preparation of plain English
documents.

T h e Unit's objectives

The Unit would seek to provide a range of services to departments and

agencies as plain English is introduced in their operations.
T h e Unit would have up to four years work. It would produce a plan
identifying the various organisations to be assisted in its work program.
The plan would outline the Unit's relative priorities and the types of
services to be provided to the groups of departments and agencies.
T h e success of the Unit will be judged by how well the delivery of
Government services are improved through the plain English program.
This objective should control the Unit's priorities. Monitoring of this
success should be undertaken every 12 months and a report delivered
to the Attorney-General in March of each year.
T h e Unit's efforts should first concentrate on those public sector
institutions with a large amount of contact with the public. It is in these
areas where the Government's social justice initiatives and deregulatory
programs should have a significant impact.
T h e Unit should also concentrate on those agencies and departments
with high levels and volumes of internal forms and other
correspondence. Where people within these organisations communicate
with each other in plain English certain benefits can be expected:
 Rewriting Forms
-

a) cost and inconvenience to clients caused by ineffective

internal communications is diminished; and
b) the public is given information and reports on decisions
in the language it uses and understands.

Costs

It is estimated that the direct employment costs, excluding the seconded

staff, would be $239,000 per year. T h e Unit would also have secretarial
support, as well as a need for accommodation and computer technology.
The seconded staff would increase the normal level of 'on-costs'
associated with public sector employment. It is estimated the annual
effect of these costs would be 55% of direct salary costs.
On an annual basis the total cost of operating the Unit would be about
$370,000.

F D Arklnson Government Printer Melbourne

 I asked him to come to meet me tomorrow and
mean while, would he note down on paper his precise
thoughts as to whether or not Humphrey is overstretched
and send them over to me.
An hour later his thoughts ammved,duly noted. These
are they:

H M Treasury
Permanent Secretary
March 2

Dear Prime Minister,

When I said that HA was not overstretched, I was of

course talking in the sense of total cumulative loading
taken globally rather than in respect of certain individual
and essentially anomalous responsibilities which are not,
logically speaking, consonant or harmonious with the broad
spectrum of intermeshing and inseparable functions and could
indeed be said to place an excessive and supererogatory
burden on the office when considered in relation to the
comparatively exiguous advantages of their overall
consideration.

Yours ever,

I read it carejiully several times. My conclusion: he

m l d do part "fH.mphrefi job.